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Millions of dollars will be burning on electricity tomorrow
With normal hot summer days expected tomorrow price spikes are forecast.
It’s not that hot
These are hot, but not unusual days for the capitals — Adelaide is forecast to be 41C, the other capitals are tame: Melbourne 33, Canberra 39 and Sydney 30. Though small inland cities are baking – like Albury at 44C.
South Australia could burn $36 million an hour
For South Australia tomorrow the AEMO is forecasting the state will need 2,800MW for 2.5 hours at $12,000/MWh. That could be $35m per hour. Note that forecasts in electricity often vary quite a lot from actuals. Looking at the truckload of cash being offered (from a generators point of view) will presumably bring in some extra supply and lower that price.
Forecast prices for Jan 15th 2019 | AEMO
For Victoria, things are even worse
The AEMO is forecasting 9,000MW will be needed at $14,500/MWh for 3 hours. That’s $130 million per hour. Hypothetically, it would be an obscene $390 million dollars just to power the state just from 3 – 6pm. Enough to buy an entire gas fired power plant and have it sitting around […]
Old coal plants don’t have to die, they just need to be fixed
Vales Point, Power Station, NSW, Australia
The Vales Point Coal plant (Part B) was built in 1978. It was sold for $1 million in 2015 by the NSW government. It’s now making a bumper profit. If it gets a $750 million renovation it could keep running til 2049 when it will be 70 years old. Vales has a nameplate capacity of 1,320 MW.
On the other hand, we could follow South Australia and spend $650m and get a 150MW solar plant that only works half the time.*
When is an old coal plant on death’s door a better bet than the worlds largest solar plant? — Every hour of every day. Plus you get free fertilizer.
Profits to keep Vales Point coal-fired power station going for another 20 years
John Stensholt and Perry Williams, The Australian
The Vales Point power station near Lake Macquarie, which supplies about 4 per cent of power for the national grid, could receive a $750m injection to ensure it runs until 2049, making it the nation’s last standing coal station, with the country’s other facilities due to […]
Green genius: Pay $1400 a year to not stop any storms
Finally some veteran engineers checked the Labor Party 50% renewable plan and the AEMO “65% scenarios”. Unlike others, their study that did not involve magical assumptions that the cost of renewables would dramatically fall. Instead they used “actual costs” and found the price of electricity will rise “84%” and cheap coal power will be forced out of business (just like what we also found here). The engineers include Barry Murphy, former managing director and chairman of Caltex. Robert Barr, an electrical engineer and academic at University of Wollongong. If only Kevin Rudd had asked them in 2007.
Engineers warn of bill shock under green energy surge
Adam Creighton, Economics Editor, The Australian
Electricity bills will soar and gas and coal-fired power stations will close if the share of wind and solar generation increases dramatically, engineers have warned after analysing the nation’s energy supply.
It found bills were likely to soar 84 per cent, or about $1400 a year, for the typical household, if wind and solar power supplied 55 per cent of the national electricity market.
A quarter of Australian rooftops have solar, […]
Once upon a time we could afford heating.
Volunteer knitters in high demand as soaring power prices leave people cold
A national army of knitters is in desperate need of more volunteers to help them meet the growing demand for winter woollies.
Victoria returns to the Victorian era
Knitters can not keep up with demand
“Some people say it has been a colder winter — I actually don’t think so,” Ms Rogers said. I think it’s been milder than what we’ve had, it’s just the need that’s so much greater unfortunately.
“Even if people have got heating, they can’t afford to run it, so they need the warm clothes or the blankets.”
Can you knit to keep a poor Victorian warm?
UPDATE from Beowulf:
I hear Audrey Zibelman, boss of AEMO, is a dab hand with a set of needles. Here’s her favourite pattern ladies: plain one, pearl one, skip 10, repeat.
It makes a jumper full of holes that must be plugged with other materials, but it saves heaps on the cost of wool and we don’t need to breed any more sheep to make our jumpers. […]
Why Australia must exit the Paris Climate Agreement, The IPA report.
IPA estimates Paris Agreement to stop storms and hold back the tide may cost $8500 per Australian family
What a deal. You could have free electricity for the next four years or an imperceptible difference in the air outside the nursing home for your children’s 94th birthday.
The Americans went for the money. So did nearly everyone else.
Damian Wild at the IPA calculates that the Paris Agreement will cost patsy Australians $52 billion dollars in the next 12 years.
Paris deal spells ‘irreparable damage’: IPA report
Rachel Baxendale, The Australian
A study by the Institute of Public Affairs, “Why Australia must exit the Paris Climate Agreement”, estimates our Paris target of reducing emissions to 26-28 per cent on 2005 levels by 2030 will impose a $52 billion economic cost between now and 2030, equating to $8566 a family.
Paris Agreement To Cost Australia $52 Billion
“The immutable law of energy policy is this: lower emissions mean higher prices.”
“Each family in Australia will be at least $8,566 worse off under the Paris Climate Agreement, on average. This is at […]
Last year AGL made $539 million net profit. This year, $1,600 million. What’s not to like about closing Hazelwood?
…
Profit statements confirm what we’ve said — closing cheap coal boosts profits for generators. No wonder AGL won’t sell Liddell for a hundred million dollars. It also shows us that the big “bubble” in electricity prices is from the doubling of wholesale electricity costs. These corporates are reaping it in far above costs. The way to cut wholesale prices is to get rid of the RET, and fix our old coal.
[ABC] Its underlying profit, which excludes one-off items and changes in value in investments and hedging positions, rose 28 per cent to $1.02 billion, at the upper end of the company’s guidance.
Even Andy Vesey admits the coal closures helped AGL:
“This increase in prices in the broader electricity market has mostly been a result of the abrupt closure of non-AGL power stations such as Hazelwood in 2017 and Northern in 2016 and higher input costs from coal and gas,” AGL chief executive Andy Vesey said.
But watch the pea. Who is trying to blame high profits on higher input costs?
Then he tosses […]
Crash Test Dummy Update: Data analysis thanks to Tom Quirk
In the South Australian experiment total wind power capacity is now far above the average state demand most hours of the day. This effectively destroys any economic case for cheap baseload power (I hear that was the aim). This fleet of unreliable generators is being supported by forced subsidies through power bills from all around Australia. Sadly, despite this rain of money falling in SA, those funds end up with renewable investors, not South Australian consumers who pay some of the highest rates in the world.
These legislated subsidies have fed so much wind power that sometimes the state produces more power than it can use. That excess power will be exported, but may or may not be actually useful at whatever time it happens. Unless it happens at peak-time, it will be eating into the efficiency of baseload providers in other states. Like an infection, inefficiency and underutilization of infrastructure spreads…
This volatility appears to make freak wholesale price spikes more likely. Quirk calculates that one hot January day last year was so wildly expensive in South Australia it added $2/MWh to the entire years average wholesale cost. Can’t […]
The Renewables Lobby subsidy and handouts are still growing. In 2018, Australia must get 16% of all our electricity from “renewables”, up from 14.2% last year.
That’s 28,000 Gigawatt hours of magical green electrons from generators that give us nice weather as opposed to generators that cause droughts, floods, cyclones and spread crocodiles, dengue fever, cause wars and change butterflies.
Welcome to modern Australia where our grid is designed by witchcraft, run by superstition, and panders to every whim of the Giant Renewables Industry Lobby.
The noose tightens in Australia.
Renewables must supply 16% of our electricity in 2018, and even more in 2019.
Source: 2001-2030 Annual Targets and renewable power percentages, Clean Energy Regulator.
Prices are rising too: Could there be a connection here?
Even the ABC now says “Something has gone terribly wrong with our electricity prices”. Prices went off the ranch from 2007, rising much faster than the CPI. This is also the point Australia started ramping up the intermittent renewables. Before that the Snowy Hydro Scheme –the only reliable and cost effective form of renewable power — had been operating for decades. Correlation is […]
We’re planning to spend $5,000 million on something to smooth out the bumps from unreliable generators. It is entirely unnecessary in a system where coal supplies the baseload and we have not created artificial rules forcing people to use green electrons in preference over stable and predictable ones. Most estimates of costs from wind and solar ignore the hidden costs — the destructive effect on the whole grid.
Wikipedia on Pumped Storage Hydroelectricity:
“the round-trip energy efficiency of PSH varies between 70%–80%,[4][5][6][7] with some sources claiming up to 87%.[8]
h/t Peter Rees, Michael Crawford, Ian Waters.
Even after Snowy Hydro 2.0, power will cost $90/MWh
Joe Kelly, The Australian last week:
Energy project financier David Carland — the executive director of Australian Resources Development Limited — argues that once the Snowy Hydro project is operating it will provide only partial back-up energy at a high cost.
Using Snowy Hydro’s modelling assumptions, Dr Carland’s calculations show the “levelised cost of energy” — or unit-cost of electricity over the lifetime of an asset — will deliver power significantly in excess of $90/MWh, after allowing for the cost of storage, cycle losses and the initial cost of […]
It’s not even summer.
NSW has been hit by clouds and a lack of reliable coal power. Prices are soaring. In NSW the Tomago Aluminium Smelter consumes about 10% of the state’s electricity. It has been forced to switch off three times in the last week because there was not enough reserve power on the grid.
The boss of Tomago, Mr Howell, said Australia is “at a crisis point with our energy system”.
“This is not summer with extreme demand. This is the likely future of our energy grid as once reliable baseload generators exit the [NEM] and are mostly replaced with intermittent wind and solar projects with no practical storage to speak of,” Mr Howell said. “Our energy debate should not advocate either renewables or conventional thermal,” he said.
— SMH, Peter Hannam,
Aluminum pot lines can only sit idle for a few hours before they cool too far and the damage becomes permanent and wildly expensive as the aluminum becomes solid.
Renewables-fans blame the emergency on the unreliability of coal
See @TheAustraliaInstitute. Suddenly Australia is the only western nation on Earth with coal resources that can’t […]
Wow. Wait til word gets out. This is dynamite.
Chinese Bitcoin miners are reopening the Hunter Valley coal power station called Redbank in NSW. They have a deal that gets around our gargantuan, mismanaged grid by buying coal power direct for 8c/kWh, while Australians in the same place pay 28c/kWh.
This is exactly the nightmare the head of the Australian Energy Management Organisation (AEMO) spoke of just last week — that “big players could abandon the grid”. That’s a degenerate spiral leaving a shrinking pool of suckers to pay for the inefficient, bird-killing, blackout prone, witchdoctor grid.
Bitcoin mining’s growing demand for cheap energy revived a shuttered coal mine
Ashat Rathi, Quartz
Consumers there pay, on average, $A0.28 ($0.22) per kilowatt-hour (kWh) for electricity. But Hunter Energy, which owns Redbank, are offering the crypto miners electricity at a fraction of the cost. The “first-of-its-kind” deal, as the Age puts it, will see the crypto miners pay only A$0.08 per kWh in the day and A$0.05 per kWh at night. Hunter Energy told the Age that the price is feasible because the electricity produced at the coal power plant would go straight to the crypto miners, bypassing—and […]
Just another hidden cost — intermittent generators are vandals on our baseload suppliers. Wind power needs gas, but gas doesn’t need the wind. When the two are paired together it makes the wind energy “reliable” but adds nearly $30/MWh to the cost of the energy from gas. Right now that cost will be added to the gas plant, but in a free market, it should be paid by the wind farm investors.
Stacy and Taylor compared the cost of running a Closed Cycle Gas plant (CC Gas) on its own or combined with a wind farm. The combination produces reliable electricity “on demand” and uses less gas to do it. The sole benefits to this odd industrial couple are a smaller gas bill and lower emissions of a fertilizing gas (CO2). All the capital and labor costs of running a gas plant are the same, but now it sits idle more often, pointlessly waiting like a spare wheel til the wind slows and gas power is needed again. About the only thing we can predict about the wind farm is that it can be relied on for almost nothing, so the gas plant must be almost as large whether or […]
The gold-plated stars of our national grid are the old coal plants we’ve built and paid off.
A US report (thanks Lance) shows how fantastically cheap and bountiful old coal and nuclear plants are. The LCOE or the Levelized Cost of Electricity includes the costs of the concrete, turbines, car parks and coal, plus the maintenance and salaries. It reveals that thirty year old, and even fifty year old coal plants, are the gift from past generations — enormous infrastructure, built and paid for, and ready to churn out bargain electrons. Or in crazy-land, ready to be blown up.
Look how long it takes to pay off the capital cost of building them (the red sector in the graph), and look how wonderfully cheap that electricity is from a 30 year old plant. Watch the pea. All those “investigative news stories” that compare the cost of building new coal to the cost of solar or wind are hiding the most brilliant and essential assets on our grid. Reopen Hazelwood now. (!)
Both sides of politics are choosing to destroy the family jewels in the hope of controlling global weather.
….
From the report by Stacy and Taylor, of the […]
Last year one of our largest coal power plants suddenly closed, with only five months warning, catching the market by surprise and taking out 5% of our cheapest generation. (This kind of improbable anti-free-market feat shows just how screwed our national market is). The Australian Energy Regulator (AER) has looked at the effect the closure of Hazelwood had on electricity prices and concluded that closing cheap brown-coal plants and replacing them with black coal and gas will make electricity prices rise. This will come as no surprise to anyone who can count to 100.
Dan Harrison at the ABC reports:
A year on from the closure of the 1600 megawatt-sized plant in the Latrobe Valley, the report from the Australian Energy Regulator found wholesale prices in Victoria were up 85 per cent on 2016.
Because electricity retailers use hedging for wholesale prices, the rise in retail prices is still feeding through. In the wash, the wholesale increase is expected to add 16% to retail prices this financial year compared to last year. After that, through some miracle, the AEMC expects prices to come back down from Exorbitant to Slightly Lower Than Exorbitant in the next two years thanks […]
Electricity prices declined for forty years. Obviously that had to stop.
Here’s is the last 65 years of Australian electricity prices — indexed and adjusted for inflation. During the coal boom, Australian electricity prices declined decade after decade. As renewables and national energy bureaucracies grew, so did the price of electricity. Must be a coincidence…
Today all the hard-won masterful efficiency gains of the fifties, sixties and seventies have effectively been reversed in full.
Indexed Real Consumer Electricity Prices, Australia, 1955-2017.
For most of the 20th Century the Australian grid was hotch potch of separate state grids and mini grids. (South Australia was only connected in 1990). In 1998 the NEM (National Energy Market) began, a feat that finally made bad management possible on a large scale. Though after decades of efficiency gains, Australians would have to wait years to see new higher “world leading” prices. For the first years of the NEM prices stayed around $30/MWh.
But sooner or later a national system is a sitting duck for one small mind to come along and truly muck things up.
Please spread this graph far and wide.
Thanks to a Dr Michael Crawford who did the original, […]
To understand the real value of electricity, consider the price at which people will give it up. “Demand Response” is the nice euphemism for a voluntary blackout. At what point do people volunteer to go without? For most of the market, apparently, it’s more than $7500/MWh.
If I read this graph correctly, look how fast the prices rise, and how small the response is. For example, in South Australia there is only about 10MW available at less than $300/MWh? (From this AEMO report). For reference the total SA demand is around 1500MW. So 10MW is less than 1%.
(See below for the
Consider how few people are willing to turn the electricity off:
AEMO expects there to be approximately 50 MW of demand response in NSW when the price reaches $1,000/MWh.
The total size of the NSW state market is about 10,000MW. Retail electricity sells for $250 — $470MWh (and only $100/MWh in the US). Hence when the price hits two to four times the normal retail cost of electricity, only about 5% of the market say they will willingly stop using it. When the price hits $7500MWh another 2% will give it up. We can’t […]
More bad luck for the renewables industry. Despite providing free energy from the sun and wind, electricity prices keep rising relentlessly, shockingly fast. Even doubling in wholesale costs in South Australia and Victoria.
It was supposed to be cheap to collect low-level-energy across hundreds of thousands of square kilometers. Who knew that subsidized, unreliable energy would induce volatile pricing, allow the players to game the system, create obscene spikes, drive out the cheapest providers, require expensive battery storage, more frequency control, more maintenance, just as much back up supply, $400 million dollars worth of extra diesel generators (and the rest) and extra long transmission lines? Who knew? — Probably thousands of engineers.
Spot the pattern? Every other nation with lots of renewables has expensive electricity and our forward market says there’s more price rises coming.
Australian electricity prices rising six times faster than wages are growing
Sydney Morning Herald
Electricity prices have jumped by six times the rate of the average pay rise, new figures reveal, as family wallets are increasingly squeezed by essential services such as education, utilities and fuel.
The most significant price rises were electricity, up 12.4 per cent, fuel up 10.4 […]
The Mystery: The most resource rich nation on Earth has the highest electricity prices?!
Ask anyone and get confused: It’s poles and wires, gaming of the system by capitalist pigs, excessive taxes, privatization, and record gas prices. The CleanEnergy Council tells us that Australia has one of the longest electricity networks in the world — we need lots of poles! And so we do. But once upon a time Australia had the cheapest electricity in the world and we still had lots of poles. Not only were miles of poles and wires, there were also capitalist pigs, excessive taxes, and privatized generators. There were wild gas price spikes too, (during which we probably just burned more coal).
Evidently, something else has changed. Something seismic that wiped out all the bids below $50/MWh.
Perhaps it has something to do with the 2,106 turbines in 79 wind farms that on random windy days might make 4,325MW that didn’t exist in Australia in 1999 when electricity was cheap and our total national wind power was 2.3 megawatts?
Another clue might be the 1.8 million new solar PV installations, which theoretically generate 7 gigawatts of electricity at noon on cloudless days if all […]
While geniuses are bragging that the Australian grid survived two normal hot summer days without falling over, they don’t mention the flaming spectacle of the cost.
Tom Quirk and Paul Miskelly, after a couple of suggestions from me, have calculated the full staggering electricity bill at $119m for SA and $267m for Victoria, making it nearly a $400 million dollar bonfire — for two days that were neither the hottest ever, or records for peak electricity use. See their work and details below.
To put this in perspective, a whole new gas plant could have been built for around $230 million. Instead of vaporising this money, Australians could have constructed one whole new gas generation plant, paid it off, and had money left over to give away free electricity.
Every household of four in Victoria just lost something like $170 of productivity for two days of electricity, and in South Australia, $280. Respectively, $45 per Victorian and $70 per South Australian. While businesses also share this burden, ultimately companies are made of people, and this is productivity lost to both states. The losers are shareholders, customers, and employees. Some will be interstate, but the pain flows back. The price is […]
UPDATE: MELBOURNE hospitals are enacting emergency procedures to prepare for the potential loss of power. Hospitals are switching off non-essential electrical equipment, including some lights, to minimize energy use. This is a “Code Yellow” alert asking hospitals to check their back up generators are ready. The Victorian Minister insists this is not about the “threat” of blackouts, but because hospitals need to be “good corporate citizens”. Pull the other one. At the very least, this is about reducing electricity bills. h/t Chris in Hervey Bay.
See further UPDATES on “The art of blaming coal” at the bottom.
How much fun can you have? The AEMO (Australian Energy Market Operator) projects that as temperatures hit 42C in Victoria, prices are forecast to rise over 100 fold. The AEMO is furiously busy issuing market notices.
The ABC tells us it is 42C, that Portland Alumina has reduced production, but for an ‘undisclosed price’ (why can’t taxpayers know what they are paying this group, not to produce aluminium today?) Meanwhile the AEMO has put the RERT plan into action: “Under the RERT scheme, AEMO has contracted 884 megawatts of “demand side response” across Victoria, NSW and South Australia.” Translated, […]
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