Guest essay by Eric Worrall
Awareness is slowly permeating through the media that renewables inevitably lead to higher electricity prices – and that the Australian energy grid is in deep trouble. But this awareness is too little, too late, to save what is left of what was once one of the cheapest electricity grids in the world.
EAPI represents the average commodity price of retail electricity paid by Australian businesses based on a Standard Retail Contract (commences in 6-months and operates for 2½ years). Source Energy Action
Climate change zealots need to get real
Peta CredlinJune 18, 2017 12:00am
WELL, now we know.
The biggest deniers in the whole climate change debate are those who think we can have affordable power, lower emissions and a reliable network.
And after they almost sleepwalked their way to defeat at the last election, it would appear Coalition MPs have found their voices again on the issue that has defined Australian political debate over the past 15 years or more.
There’s no doubt that any policy that lowers Australia’s CO2 emissions will increase the cost of power and any move away from baseload capacity will make our network more unreliable.
Forget the movie, this is the real “inconvenient truth” that climate change zealots have never wanted to acknowledge. For too long, the views of the Zeitgeist have dominated debate and anyone daring to question any aspect of climate change was branded a sceptic. Scientific fact or not, any issue that’s galvanised the Left to the point of hysteria makes me sceptical that it’s more about the politics than anything else.
Right now, China’s emissions are 20 times those of Australia and even if they meet their Paris Agreement commitments, by 2030, China’s emissions will be 50-60 times ours. Seriously? We sell off industry and jobs in a mistaken belief the world that is acting with similar intent but it is clear they’re not, and won’t. Again, remember my refugee example and you get what I mean.
It’s claimed that the Chief Scientist’s report to COAG aims to address the “trilemma” of achieving lower prices, greater security and a 28 per cent reduction in emissions by 2030. Wrong. The report is about meeting the emissions reduction aspiration (which it converts into a commitment) at the lowest cost without major interruptions to supply. It’s not about affordable, reliable power; it’s about climate change.
So what about Finkel? The Finkel Report is a government paper released a few days ago in Australia, which attempts to chart a roadmap for transition of Australia to renewable energy.
Buried under the waffle about energy security and orderly transitions and the need for more energy security is this gem;
3.2 Agree to implement an orderly transition:
• NEM emissions reduction trajectory
• Clean Energy Target
• Require all large generators to provide 3 years’ notice of closure.
7.2 Form an Energy Security Board.
The requirement for the notice period is repeated several times throughout the report.
The reason for the three year notice of closure is likely the recent abrupt closure of coal plants in several locations in Australia.
Unlike gas, coal cannot be scaled up and down at whim to try to balance the wild fluctuations of renewables. Under Australian rules (and rules in many US states), renewables appear to have pre-eminent access to the grid.
Australian Coal operators are responding by shutting down now unprofitable businesses.
The Australian government response – force remaining coal plant operators to keep operating for a minimum of three years after their businesses become unprofitable, regardless of financial losses to shareholders.
This in my opinion is naked government expropriation of shareholders funds. Not a policy likely to encourage badly needed investment in Australian energy infrastructure, at least not the kind of investment which will lead to a reduction in skyrocketing Aussie electricity prices.
Power prices skyrocket
Turnbull policies make energy unaffordable
Who cares that fewer and fewer people in Australia can afford this most basic necessity? At least we’re saving the planet, right?
Actually no, since nothing Australia does makes any difference to the global climate. It just appeases the idiotic Green/Left activists, while India and China burn cheap coal to their hearts’ content.
The Australian highlights ($) the continuing price rises for electricity and gas:
About three-quarters of households and businesses on the east coast and South Australia face substantial increases in power bills from next month, after Origin Energy announced price rises for electricity and gas.
Origin, the biggest of the three major generators and retailers, confirmed the pressure on wholesale prices from a historic lack of investment in new baseload generation capacity. AGL Energy and EnergyAustralia also announced price rises in recent days.
NSW, which came close to blackouts amid soaring temperatures in February, faces the steepest percentage increases for power, with business bills set to rise 18 per cent, or an average $748 a year, while households will pay about $282 more, up 16.1 per cent.
But South Australians, who faced blackouts from September and who already pay most for power, will face the biggest dollar increases. Businesses are set to pay an average $920, or 15.3 per cent, more, while households will pay $313, or 15.9 per cent more.
As with other “gentailers”, Origin has partly spared Queenslanders, who face rises of 3.5 per cent, or $61, for households and 5.9 per cent, or $276, for businesses in their electricity bills. Origin’s rises for electricity are lower than those of AGL Energy and EnergyAustralia, which have revealed hikes of almost 20 per cent.
Gas prices are also rising, but at a slower rate than electricity and well short of the doubling, tripling and even quintupling of prices for large gas users that had not locked in long-term supply contracts in the past two years.
Origin, which also owns one of the three Gladstone LNG export terminals criticised for soaking up domestic gas supplies, said it would raise residential gas prices by 8.5 per cent in NSW, 9.4 per cent in South Australia and 2.5 per cent in Queensland. Business prices will rise 6.3 per cent, 8.4 per cent and 2.2 per cent respectively.
Electricity prices doubled in the past five years as uncertainty about energy and climate policy stalled investment in new generation capacity, while transmission and distribution networks — which account for up to half the electricity bill — were allowed to over-invest in the assets that are used to calculate their returns.
Soaring prices and the growing risk of blackouts have spurred governments into action, including threats to limit gas exports from Gladstone so the local market is properly supplied, $550 million of investment by the SA government in a new gas-fired generator and an adjacent 100MW battery, and orders by Queensland to restart the Swanbank gas power station and have the state’s generators pressure the market to lower prices.
Energy futures, which indicate prices a year from now, have started to trend down but observers said the measures would not affect prices for a year. The federal government is considering a report by Chief Scientist Alan Finkel recommending a clean energy target to guide investment in generation capacity.
Origin executive general manager of retail Jon Briskin said price rises showed “how crucial it is for Dr Finkel’s recommendations to be translated into actions”.