Australian Energy Market

[HBS Guy]

Not quite a AGW issue, more the typical big business setting out to remove competition that is causing huge spikes in energy prices and causing blackouts. If NSW has its predicted blackouts then sorry for the people affected but that should reduce the attacks on SA’s relaince on wind power.

http://reneweconomy.com.au/high-energy-prices-blame-fossil-fuel-generators-not-renewables-84196/

Privatisation has more to do with blackouts than renewable energy (tho the SA state–wide blackout showed some fine tuning of windmill settings was needed.) Just look at the pictures of the electricity transmission towers folded over like tinfoil due to not-that-high winds. That tower where one leg had come out the ground showing just a bit more cement around it than we would use for a fucking fence post!

If I was the SA Premier I would sue and sue the private network operator until they handed the network back to the government.

I need to reread the linked article closely later and will make a post on it.

And “our” federal govt is a total disgrace, especially in relation to AGW and the power market. We badly need a couple decent nuclear generators to provide baseload, emissions–free electricity!

[Lefty]

There needs to be an enquiry into this. Apparently there were back-up generators available that could have prevented the SA black outs but they were not brought on line, even though they had several days notice of the coming heatwave.

Generating electricity serves only one purpose – to affordably and reliably supply something modern civilization cannot do without.

How is it that this extrordinarily complex marketing system that splits what is essentially a single, integrated system of production and delivery into many dozens of private owners of various bits and pieces of the whole, which then requires strict and constant regulatory oversight to prevent these individual profit-driven firms from gouging the nation or even threatening supply integrity – how in God’s name did this ever come to be veiwed as a more efficient way to go than a publicly-owned monopoly?

[HBS Guy]

If I was Weatherill I would sue the private providers everytime there is a blackout, sue them so they sell the network back to the state and we can set it right.

Renewable power needs to be a national thing, generators connected by a network of ultra high voltage DC lines. Coastal wind farm not generating, send power down from a solar generator etc.

That said, I doubt solar will ever be deployed at a massive scale—need a 20Km by 20Km array of mirrors etc to get gigawatts—so far only megawatts have been generated.

And nuclear to back it up and provide heavy power to industry.

[Lefty]

If new technology can use nuclear generation safely (new reactors are very much safer and vastly superior to the Three Mile Island/Chernobyl/Fukashima types) then South Australia could probably generate enough electricity for the whole country, given that it posseses a not-insignificant portion of the worlds uranium reserves. If the politics of it can be overcome.

The core of the whole issue though is that completely contrary to the insidious ideology of neo-liberalism that has captured the entire modern worlds thinking and policy making over the past few decades - the fact remains that there are some things that only governments can do, or do better than the private sector.

It remains an article of faith in most policy-making circles that there is virtually nothing that private enterprise cannot do better, more efficiently and more cheaply than governments. The stupidest thing is how this belief remains dominant despite decades of shocking privatization failures which then have to be fixed up by governments. The ideology remains completely impervious to the blindingly obvious facts that it is largely a falsehood.

Electricity generation and provision is at the end of the day, a single, integrated system. There is no one component that functions independently of the whole. It's a chain - when one of the links fails, the system can no longer deliver. The logic behind breaking this single chain up into many privately-owned links is..........there is no logic - it's ideology.

[HBS Guy]

It is lunacy.

[HBS Guy]

Idiot Libs now all gung ho for coal, in defiance of all common sense:

Business Council chief Jennifer Westacott warned a “calm and informed” debate was needed to bring about a national consensus on energy policy.

“We need the state and federal governments and the business community to come together and say, ‘How do we make sure that we can give that security and reliability, and, of course, the affordability that households and businesses are looking for?’,” she told the ABC.

Three state Liberal opposition leaders in Queensland, SA and Victoria say the solution lies in a single national renewable energy target, rather than the states going it alone.

Labor environment spokesman Mark Butler said the opposition supported a national renewable energy target beyond 2020.

“This is a national system that requires national policy,” he told reporters in Canberra.

“We would like to see a position where there is an emissions intensity scheme that is recommended by the National Energy Markets Commission, the chief scientist, the CSIRO, all of the industry and all state governments, as the centrepiece of a national policy that allows investors to start to renew and to rebuild our electricity generation.”

Mr Butler said the Liberals’ attack on renewable energy would mean fewer jobs, higher power prices and more pollution.

The Business Council was one of 18 groups involved in a joint statement calling for an end to finger-pointing and the start of a new mature debate.

http://thenewdaily.com.au/news/national/2017/02/13/renewable-energy-policy/

[HBS Guy]

Good post!

kaffeeklatscher
February 14, 2017 at 7:38 PM
2gravel

Abbott had already done a good job of destroying it. There were 10s of billions of $ waiting to be poured into replacing old coal power stations with newer more efficient ones ones and a myriad of clean energy projects backed by the big end of town ready to go. Labor gave them the certainty to make the investment but Abbott and his “roll back” threats destroyed that.

At a guess some of the blackouts this summer would be related to projects that did not go ahead , conventional and renewable, because of the well founded fear of change to Labor’s legislation by the fecking knuckle draggers and Koch Bros political prostitutes of the Coalition.

https://pbxmastragics.com/2017/02/12/turnbull-government-reveals-a-lump-of-coal-at-its-heart-in-a-disgraceful-week-of-name-calling/comment-page-3/#comment-262684

When the cretin abbott said he wanted to cut the RET investment and jobs in the renewable energy sector both plunged. Labor eventually managed to put together a compromise of a smaller cut to end the stalemate and the freeze on RE sector investments and jobs. The fucking Greens just sat on their hands and did nothing: they obviously have no regard for the environment or jobs!

[HBS Guy]

Poor Waffles! His attack on renewable energy esp in SA has rebounded on him:

http://thenewdaily.com.au/news/national/2017/02/13/malcolm-turnbull-renewable-energy-attack/

Last week showed that even coal–heavy states like NSW had to cut consumption of power (this time the aluminium smelter in NSW that takes 10% of all NSW power had to shut down. The Pelican Island gas fired power station not firing up to take up the shortfall from wind and so causing load shedding did not go down well at all.

Gas is going to have to play a bigger part but nuclear is better than gas in terms of emissions.

Federal govt will have to play a leadership role in renewable energy, e.g. building a renewable grid carrying power via ultra high voltage DC from where RE is plentiful to where it is deficient. That is the missing piece. That and a nice big nuke plant in SA!

[Lefty]

What's completely missing is any single overarching vision shared by all entities in the industry - you cannot have a single goal so long as multiple private ownership of components remains. Breaking up and privatizing a single publicly-owned monopoly - one that is by very definition a natural monopoly - was a stupid, stupid, stupid idea, driven completely by ideology and not one single shred of evidence that the nation would benefit.

There are problems that will never be solved until what was split asunder is made whole again and ownership returned to the public with the jobs of those ultimately responsible for delivery being up for review by the electorate every few years.

Gas is looking like being in short supply thanks to the massive LNG edifice here at Gladstone, which is hoovering up gas everywhere to meet it's massive supply contract obligations. This thing is the most jaw-dropping monument to stupidity in QLD's history - a huge industry that makes no money, pays no tax, employs only a tiny handful of people, damages farmland and will likely harm existing local gas-dependent manufacturing and production industries (around a quarter of a million jobs) by forcing up the price of gas by creating shortages through it's enormous hunger for the stuff for export. Stoopid is as stoopid does.

[HBS Guy]

They really do fuck up everything they touch, don’t they? NBN, motor car industry, power generation/transmission etc.

I will be looking to be as independent of the grid as I can be: solar cells, windmill, battery. Same with water: rainwater tanks, grey water etc. With the fucking Libs you never know what they will fuck up next!

[HBS Guy]

Ross Gittins on politics:

http://johnmenadue.com/blog/?p=9464

Put it here because energy is one area of reform that will go ahead. Ross points out the drive for microeconomic reform has degenerated into big business rent seeking.

Ross thinks micro-economic reform is more neoconservative shit. He is wrong there. I supported economic rationalism but by the time Howard had been booted out that had become just neoconservatism.

A reforming government is going to have to nationalise some privatised businesses, obviously after the Budget is on a sound footing or, where a business is too big, e.g.the Commonwealth Bank, set up government owned rivals. If it really captured the publics’ favor it could try a referendum on classifying some investments as essential and immune from privatisation. Perhaps this is not necessary. The Future Fund has a huge wad of cash and under the inspired (not) leadership of Tip is not doing much with it. Give it the NBN and tell it to run out FTTH financing some itself, borrowing the rest.

A new government bank based on Post Offices and also owned by the FF could put a bit of a brake on private bank rip offs and unconscionable practices. The govt could borrow the seed capital and the FF could also inject capital. It need not be huge, just a thorn in the side of the big banks. Maybe smaller banks would work with it, giving it a network of ATMs.

Privatised networks are going to break down more and more, I reckon they could be brought back into public ownership pretty cheaply, say in another 10 years: fossil fuel fired generators will be stranded assets soon enough.

Undoing most of Howard’s reckless spending still in the Budget, fixing the PRRT, instituting the mineral resources rent tax and renegotiating or rescinding the FTAs should give our industry a bit better go. Nuclear power to get more aluminium smelting and the like

I don’t know how we could get manufacturing back here. Keeping out cheap rubbish (anti dumping, rules re fitness for purpose etc) and just providing decent infrastructure and encouraging research and commercialisation of new products or processes etc should start that. Really ploughing money into stem cell research will pay off big time as will encouraging renewable energy: we should be exporting tech in this field, fuck abbott anyway, drongo.

Electric cars would be good, government getting behind it could get charging stations set up in more places, and home solar installations could charge the car too, or charge the car at night when cheaper rates for power apply.

Lots more microeconimic reform to do!

[HBS Guy]

Let us put the CCS (Carbon Capture and Storage) crap to rest:

In an interview with the ABC's AM earlier this week, Finance Minister Mathias Cormann – who ought to have a head for numbers – listed energy affordability and reducing emissions as key energy policy considerations, and then went on to pledge support for coal technologies that will either put our national emissions targets out of reach or cost about 70 per cent more to build and operate than conventional coal. And those are CCS costs cited by a US academic who is relatively optimistic about its prospects.

The unfortunate but undeniable reality is that, when it comes to CCS, it's easier to list the projects that have been terminated than those that have come to fruition. There's no question, in fact, that the technology is struggling – the only matter in doubt is how many of the Liberal Party's rank and file have had their heads in the sand while CCS projects worldwide have gone belly up. A goodly number, it would seem.

And what about those CCS projects that have succeeded? Boundary Dam in Saskatchewan, Canada, for instance, the first full-scale post-combustion coal CCS project, which opened in September 2014. Well, despite a steady stream of upbeat media releases from operator SaskPower, leaked documents reveal that Boundary Dam has been beset by ongoing problems, shutdowns, escalating costs and capture rates that fall a long way short of what was projected.

Based on official figures from the Global Carbon Capture and Storage Institute – the group that promotes the technology – Boundary Dam's carbon dioxide capture rates are, on average, almost 25 per cent below what was initially projected, and the operator has been embroiled in a protracted multimillion dollar lawsuit over unresolved – possibly unresolvable – technical issues.

In short, the only commercial-scale CCS coal plant in the world – until the commissioning of Petra Nova in Texas last month – has overpromised and underdelivered. And if Finance Minister Mathias Cormann would like to take a quick look at the figures, which are disappointing to say the least, he'd see the costs associated with cleaning the carbon are fully four times higher than anticipated, according to SaskPower's CEO Mike Marsh.

And that's just the good news. We haven't even touched on the real imponderables yet, such as where to store the gargantuan volumes of carbon dioxide that would need to be disposed of if CCS were deployed globally to reduce fossil fuel emissions. Based on analysis by researchers at Utrecht University, that figure would be about 60 billion cubic metres a year – or about 120 times the capacity of Sydney Harbour.

There's not much talk, either, about the colossal water consumption associated with CCS – which almost doubles when the technology is installed – nor, worse still, the health impacts of carcinogenic pollutants stemming from the solvents used to scrub carbon from the exhaust stream.

All of which probably explains why Jeff Erikson, general manager at the Global CCS Institute, concedes that while carbon capture and storage may have a role to play in bringing down emissions from other sources, it won't rescue the coal industry. No kidding. But as the polls show, most of us have already grasped that inescapable reality. All we need, now, is for someone to please explain it to the government.

http://www.smh.com.au/comment/why-cant-the-government-understand-theres-no-such-thing-as-clean-coal-20170222-guife3.html

“it won't rescue the coal industry.” So why the fuck even discuss it?

[Lefty]

There's going to be a problem with waiting until the budget is on a sound footing - it's unlikely to happen again in our lifetimes.

The historically normal situation - ongoing overall government budget deficits - has re-asserted itself. The private sector can no longer push the government budget into surplus by placing itself in a long-running deficit through a huge credit binge. We've deregulated the finance sector and continually pushed down the rate of interest to ensure more private borrowing now for a couple of decades. We seem to be close to - if not already at - the point where repaying borrowed money simply can't be made any cheaper.

The fibs are attempting to reign in the deficit by cutting spending on the most vulnerable. But without a persistent private domestic credit surge and/or a large and permanent surplus in the external sector, government spending cuts are simply dampening the economy, which suppresses tax revenue and increases the budget deficit counter to their attempts. Spending cuts cause falling tax revenues and the two then just chase each other round and round the toilet bowl in a downward spiral to nowhere.

As long as government budget surpluses are considered the Holy Grail of economic management to strive for, the situation is unlikely to improve.

Perhaps having things like electricity and water as government-owned corporations rather than a direct department might be more acceptable to this faulty logic. Could be used to keep that portion of government expenditure off the books? Some of these things have been highly successful in the past - they have been able to supply crucial things to the public (and business sector) reliably and at affordable rates while being entirely self-financing. Gladstone Ports Corporation is a good example - a huge natural monopoly that is 100% self-financing and also turns a profit on top which it returns to the QLD government's coffers. Why the fuck Campell Newman wanted to flog such a fat cow when he would have then only needed to turn around and buy milk defies all logic and can only have been pure ideology.

But first government must be willing to fork out the $$$ to buy back what was flogged to the private sector in the first place.......

[HBS Guy]

Won’t have a choice soon—privatised infrastructure is not exactly flourishing.

[Lefty]

Yep, it's been an ongoing theme for a couple of decades around the modern world - private enterprise runs the former public (often vital) entity into the ground, pockets a shitload and then duly fucks off, leaving government to have to step in and rescue it anyway since they are things we typically can't do without.

And yet on and on it goes with the lesson never being learned. It's going to take a helluva lot of political will to break out of the fashionable consensus.

[Lefty]

John Quiggin......

A publicly owned electricity grid is the only way to put a cap on costs, keep energy competitive and solve the country's energy crisis, according to an economics expert.

Professor John Quiggin says the creation of the National Electricity Market has been a failure, and governments should start buying back electricity transmission networks.

He argues without the need to generate private rates of return, public ownership of the electricity grid would push costs down, leading to cheaper prices for consumers.

"It's about the failure of the electricity network as a whole to deliver the kind of outcomes that have been promised for the last 25 years or so," Professor Quiggin said.

"The starting point for fixing things is a proper, publicly owned national grid."

http://www.abc.net.au/news/2017-03-03/renationalising-electricity-grid-could-fix-failure-of-system/8320910

[HBS Guy]

I have been saying this for a while.

People can still build wind farms and sell electricity to the grid or to private buyers but the grid must be publicly owned as must stand by generators.

[Lefty]

Not specifically electricity but covers the situation broadly......

Face the facts: competition and profit don't work in health, education or prisons - John Qiuggin

[HBS Guy]

Nope, nor in provision of water, nor in ownership of certain databases, especially lands titles and the ASIC company database.

(ASIC database no longer up for sale, thank goodness but AFAIK NSW is still thinking of selling the lands titles office database.)

[HBS Guy]

Senior executives from AGL Energy have given evidence that the main issue causing problems with reliable energy supply in South Australia is “dysfunction” in the gas market – not too many windfarms making the grid unreliable.

Executives from AGL told a Senate inquiry in Melbourne on Tuesday they would like to build a new gas-fired power station in South Australia to increase base load capacity in the state, but gas supply was chronically unreliable in the eastern states.

Richard Wrightson, AGL’s general manager of wholesale markets, told Tuesday’s hearing the problem was so dire the company was contemplating building its own LNG hub in Queensland to help secure reliable supply downstream.

“Dysfunction in the gas market is causing most of the systemic problems we are seeing in South Australia,” Wrightson told the Senate select committee into resilience of electricity infrastructure in a warming world. “We would love to be able to contract more in that marketplace but the main restriction on being able to do that is access to flexible gas contracts that we are able to trade in an out of.”

https://www.theguardian.com/environment/2017/mar/07/energy-executives-say-gas-market-not-windfarms-to-blame-for-south-australias-woes

Now the fucking farmers federation is calling for a carbon tax. Morons, like the NBN that would have benefitted country people so fucking much you destroyed it or let it be destroyed because it was a Labor idea. Now you won’t get nothing, morons!

[Lefty]

I don't agree with everything posted on Macrobusiness but this opening paragraph from an article yesterday sums things up nicely I think....

“I’ve lost count of how many folks that have complained about various solutions to the east coast gas crisis triggering the dreaded “sovereign risk” for the companies involved. To them I say just one thing today, any nation that cannot rely upon the production of energy is not sovereign at all. Energy is essential to security, to health, to civil order, to industry and standards of living. Energy is not some random market. It is the lifeblood of every modern nation.”

http://www.macrobusiness.com.au/2017/03/gas-crisis-simply-issue-sovereign-security/

We are still beholden to the stupid, stupid, stupid neoliberal idea that private markets will always sort things out for the better - by handing control of our supply of energy to those whose only motivation is maximum profit and who cares what happens to the country (most are multinationals) - I think we are seriously dicing with disaster.

If we do not have reliable baseload power then we have nothing. Further, industry estimates around a quarter of a million jobs depend directly on gas as a raw material input, not just for electricity generation. Leaving all this to pure individual self-interest (by a multinational-run cartel no less!) rather than governance in the national interest is utter madness.

[HBS Guy]

Yup! Very foolish. Turdfull lambasting SA—scapegoating just another expression of his total weakness and inability to act—should really look closer to home.

Not only is all gas being exported for pathetic prices/royalties but coal fired generators are being closed as they reach or surpass planned working life.

REALLY need action by the Fed govt now, a decision on nuclear power or a national ultra high voltage DC grid or something. We won’t get it tho.

[Lefty]

REALLY need action by the Fed govt now, a decision on nuclear power or a national ultra high voltage DC grid or something. We won’t get it tho.

Yup. Going on his usual performance, Turdfull will move so quickly to do nothing about it that we won't even see him not doing it

[HBS Guy]

Fuck, why can’t enough useless/clueless Lib back–or front–benchers die so we have enough bielections to change the govt? We can’t really afford 2.5 more years of this shambles when decisions need to be made on energy, the NBN, get the economy rising again etc. The housing thing important economically but energy needs to come first!

[HBS Guy]

Jihn Menadue, not his best by a loooong shot but to the point:

http://johnmenadue.com/?p=9715

Bipartisanship on energy is bullshit with the Coalition for the past 8 years buggering up energy policy.