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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, […]
Watching the AEMO dashboard as a hot summer day hits
Is this the summer crunch-time that the the National Grid managers have been fearing?
Today things are not running smoothly in the green states of Victoria and SA where prices this minute have hit $14,000 per MW hour, or $14 per KWh. These are wholesale prices. Right now heads of major industries are watching the dashboard, turning off everything they can turn off, or switching on the diesel generators, or counting hundreds of thousands or even millions being added to their bills if production cannot stop.
Demand Management schemes (a form of load shedding) will be running to reduce demand — air conditioners will be remotely switched down.
How much of the productive brain power of Vic and SA is distracted from more useful tasks today?
The AEMO has put out an Actual Lack of Reserve Notice (LOR1) saying that Victoria is 300 MW short: “The contingency capacity reserve required is 1100 MW. The minimum reserve available is 815 MW”. Another notice of a “non-credible contingency event” (a code for “something broke”) reports that a busbar, transformer, and line have tripped or opened in Victoria, unplanned.
Victoria
…
[…]
The fear is palpable
How much fun can you have living in a global experiment? In Australia, peak summer is about to hit in a post-Hazelwood-electricity-grid. There’s a suite of committee reports as summer ramps up. Everyday there’s another Grid story in the press, and a major effort going on to avoid a meltdown. Minister Josh Frydenberg announced today that “we’ve done everything possible to prevent mass blackouts”. Or as he calls it, a repeat of the South Australian Horror Show. Politicians are so afraid of another SA-style-system-black that they are throwing money: The “Snowy Hydro Battery” will be another $2 billion. Whatever. It’s other people’s money.
This is what they are afraid of:
The red bars mean “Reserve Shortfall”. The dark blue matter is “Generation”. The graph covers two years (sorry about the quality) so the two red bursts are summer 2018 and summer 2019.
SA Medium Term Forecast, Outlook, AEMO, Nov 16th 2017, South Australia.
Oddly we are headed for a critical time, but this’s the most recent graph I can find — thanks to Wattclarity — from November 16th, 2017. (Here’s an earlier version from March 2017. and from Dec 2016). Perhaps there is a newer […]
A Sunday Mail survey (paywalled) shows that despite SA having more “free, cheap and clean” renewable electricity than just about anywhere in the world, the number one biggest issue for most South Australians is … “electricity”. And despite all the renewable jobs created, the second most common concern is “jobs”. Going for the Paradox-Trifecta: most strangely of all, with elected leaders who are leading the largest energy transformation since civilization began, the third “biggest issue” facing South Australians is “political leadership”.
Thanks to Eric Worrall, who describes South Australians as “the world’s renewable crash test dummies”.
…
SA has an election coming up in March, but at the moment voters there are caught in the bind between the reality of electricity shocks, and the belief that “renewables are cheap”. Will the local Libs (the opposition) have the spine to stand up and speak the truth and make this election about energy and climate, or will they pander #metoo, and lose the unloseable?
Will the Libs get the message here? Most South Australians like the sound of renewables, but when it comes to the crunch, and the issues they will vote on, electricity prices and jobs will rule. This is […]
The Foodbank press release: Financial stress pushing millions of Australians into food insecurity
One in six or, 15% of the Australian population, apparently has experienced “uncertainty” around food in the last 12 months. For some, that’s only one episode in a year but still, in a first world country which is a major food exporter, it’s not a sign of wealth and good times. If the survey is to be believed, fully 9% of Australians are experiencing a food shortage every month or even more often. Surprisingly, half of those experiencing food uncertainty have jobs — working serfs. Foodbank blames it on living costs — like rent and power bills.
A nation in decline: A ten percent increase in people seeking food relief across the nation
One thing is sure “bill shock” is hurting people, and it’s getting worse:
Foodbank provides food for over 652,000 people a month, however, the front-line charities report that demand for food relief has increased by 10% in the last year and they are forced to turn away 65,000 people every month due to lack of food.
How much does renewable energy contribute? Hard to say — all the factors are confounded and […]
Minister Josh Frydenberg has just implied Australia might drop ongoing endless renewables subsidies (and thus dump the Finkel chief-“scientist” plan). He didn’t say that in so many words, but hinted at it, and will now wait to see how the idea goes down.
Soak in this reasoning — renewables are becoming so cost competitive they don’t need subsidies. He’s calling their bluff. It’s like the announcement to sack climate scientists because “the science is settled”. Let’s take them at their word and follow that propaganda to its logical end:
The key message from Josh Frydenberg is that subsidies for renewable energy are coming to an end.
There is no Clean Energy Target in sight in Frydenberg’s plan for a new policy by the end of this year. The phrase does not get a single mention in his new speech on the way ahead.
In a key argument, the Energy Minister argues that the cost of building wind and solar power has more than halved in recent years.
He does not rule out more subsidies explicitly, but the clear suggestion is that renewable energy generators are now at a point where they can […]
Electricity prices jumped in July. Now, retail sales are falling as wallets run out of money. When Greens, Labor, Conservatives said we need insurance, only skeptics pointed out the price.
Commonwealth Bank economist, Gareth Aird, calls the fall a “shocker”.
Shoppers stay away as power costs bite
–Adam Creighton, The Australian
In a sign sluggish wages and higher power prices are starting to bite, the new financial year has seen the biggest fall in retail sales since 2009…
The Australian dollar fell back towards US78c yesterday after the Australian Bureau of Statistics revealed retail sales had fallen 0.6 per cent between July and August, defying economists’ expectations they would rise modestly.
“Households are facing several headwinds, including record low wage growth, record levels of debt, slowing house price growth, and, importantly, sharply higher energy bills,” said ANZ economist Jo Masters. The drop in retail sales by a cumulative 0.8 percentage points over the two months to August, the biggest two-month decline since 2009, comes as consumers receive their first round of power bills after prices went up more than 20 per cent since July.”
Who would have thought? The country is forced […]
Let’s get “certainty” — dump the RET.
Chris Kenny in The Weekend Australian puts almost all the pieces together. This is self-sacrificial, pointless, and the RET is the problem because the subsidies allow renewables to drive out true baseload generation. The so-called hunt for “certainty” is a hunt for high prices because no one will speak the obvious “Dump the Renewable Energy Target”.
Dumping green folly will secure energy future, reboot economy
We are an energy-rich nation. Last year we exported 388 million tonnes of coal (valued at $35 billion) to supply affordable and reliable energy to countries such as Japan, China, South Korea and India. Our liquefied natural gas exports are doubling from 30 million tonnes a couple of years ago to almost 80 million tonnes (valued at $42bn) by 2019.
Australia also remains one of the largest exporters of uranium…
While we happily export our energy advantage, we have deliberately sacrificed it at home.
Turnbull — doing exactly the wrong thing after Trump won:
Astonishingly, less than a day after Donald Trump won the US election promising to abandon Paris, Malcolm Turnbull announced Australia’s ratification. The Prime Minister thumbed his […]
Who knew it would cost a lot to change the climate?
It’s crisis time in Australia. Electricity bills have doubled, and the fallout is just starting to feed through to consumers. Not only does electricity cost more, but so will nearly everything else. Large businesses, economists, and miners are warning that Australians will be paying so much more it will push our inflation figures up.
Major packaging and brick makers, supermarkets, soft-drink bottlers and poultry producers said yesterday the bill shock would chip away further at profit margins and could push up consumer prices…
Economists, including National Australia Bank chief economist Alan Oster, warned the power bill shock was expected to show up in national inflation figures as early as next month.
He predicted headline inflation would increase 0.6 per cent for the July-to-September quarter, purely from energy price rises.
Paul McArdle from WattClarity makes the point that for most of the last 16 years our electricity prices didn’t even rise with inflation. In this graph, since the start of the NEM (National Electricity Market) in 1998 the spot price of electricity was about $30 per MWh, barring major drought, carbon tax and the […]
In a genius move, Victoria, which has “soaring” electricity prices, now announces plan to copy South Australia where people pay more for electricity than anywhere:
The Andrews government this morning unveiled a new renewable energy target with a commitment to power up to 25 per cent of the state from renewables by 2020 and 40 per cent by 2025.
The government has backed the construction of two large scale solar farms in regional Victoria which will provide another 140MW to the state’s supply, and has set up a reverse energy auction system to bring forward an additional 650MW to the state’s supply.
Meanwhile the trams will run on sunshine.
Legislation creates savings, how?
Victorian households will allegedly each save around $30 annually on power bills under the new plan, while medium sized businesses have been projected to save up to $2400 a year under the legislation which will be introduced to parliament today.
It’s almost like Victoria plans to make electricity from legislation (hey, it’s renewable, and will never run out). By making electricity shockingly expensive, Government ministers can talk of “savings”, even though prices will be far higher than the average price […]
It’s not even close: If South Australia seceded it would have the highest electricity price of any nation on Earth.
Australian Households pay highest power prices in the World, AFR.
South Australian households are paying the highest prices in the world at 47.13¢ per kilowatt hour, more than Germany, Denmark and Italy which heavily tax energy, after the huge increases on July 1, Carbon + Energy Markets’ MarkIntell data service says.
When the eastern states’ National Electricity Market was formed in the late 1990s, Australia had the lowest retail prices in the world along with the United States and Canada, CME director Bruce Mountain said.
The Markintell report graph:
…
Hmm — odd coincidence of Price with Wind Energy Penetration:
Wind energy is “free” but countries with the most wind power are also the most likely to get to the top of the Prize Pool for exorbitant electricity. Wind energy penetration is highest in Denmark (1st), Portugul (8th), Ireland (6th), Spain (11th), Germany (3rd). Conversely, renewable energy penetration is low in places at the tail end of the price curve like Luxemburg 6%, Estonia 15%, Hungary 7%, Lithuania 15.5%. In the low mid price […]
Matt Howell, the CEO of Tomago Aluminium Smelter, told a few home truths on ABC radio Monday.
To paraphrase in my own words:
1. Aluminium Smelters gobble electrons for breakfast. His smelter uses 10% of the entire electricity supply of the most populous state in Australia (NSW).
2. If power goes out without warning for more than three hours, the smelter pot lines freeze, permanently. The company goes to the wall.
3. The largest battery in the world would keep their smelter going for all of 8 minutes. There is a good reason there are no solar or wind powered aluminium smelters anywhere in the world.
4. The government can ‘t let the market solve anything whilst it is simultaneously destroying the free market by propping up the market failures at the same time.
5. Electricity pricing has suddenly got very ugly. Their electricity bill may now be subject to price spikes where it could cost them $4 million just to keep one pot line running during that spike. It is as if suddenly gas stations only sold $400 per Litre petrol. (Which would be $1800/per gallon). What he doesn’t […]
Australia is a wonderful living experiment for nations worldwide of how a people with more energy resources per capita than anywhere else in the world can sabotage a perfectly good electricity grid in the hope of appeasing the Weather Gods.
At the request of Senator Malcolm Roberts, Alan Moran slices up our “Chief Scientists” report (known as the Finkel Review) and gives us some home truths. Electricity costs have doubled in Australia, Finkel’s plan would take what isn’t working, and do more of it — in the process pretty much destroying one fifth of our manufacturing base, costing us thousands of jobs, and adding almost $588-$768 per household annually to energy bills. Let’s ask Australian voters if they want cheap coal power or if they’d rather spend $600 a year to make the weather unmeasureably nicer in 2100? Why don’t we have a plebescite on that?
In other basic truths Moran points out that while Finkel seems to think new coal fired plants are uneconomic, everyone else is building them around the world. Old plants don’t have to be blown up on their 50th Birthday either. They can be maintained instead, like lots of other perfectly good 50 year old […]
Something very “seismic” has happened to our electricity prices.
Paul McArdle of WattClarity goes through each state looking at quarterly trends and prices, and remarks that things are going “off the chart”. We had some electricity crises in Australia in the last 12 months, and 2016 was a significantly more expensive than all previous years bar the major drought year of 2007. But ominously, prices haven’t come down in what should be a “normal” quarter. In Tasmania there was a crisis last year when dams ran dry, and the undersea Bass cable broke. But this quarter, prices are only $3.20/MWh lower than the crisis levels of Q2 2016 despite water in dams and a working cable to Victoria. Something has gone seriously wrong with our electrical grid and market. In both Victoria and South Australia prices are higher on average than any previous April-June quarter in the 19 year history of the National Electricity Market. In Queensland and New South Wales, prices are at the “second highest”.
McArdle goes to some length to explain that this is not “one factor”, which seems obvious and fair — Its the combination of the closure of Hazelwood and Port Augusta coal generators; the […]
South Australia has the largest uranium deposit in the world, which it digs up to sell to other countries to make electricity. It also has lots of sun and wind and empty space. If any state can make solar and wind power work, surely it’s there.
And renewables are working for SA, working to put it in top place for Global Electricity Bills.
South Australia power prices to rise to highest in the world on Saturday, energy expert warns
South Australia will overtake Denmark as having the world’s most expensive electricity when the country’s major energy retailers jack up their prices this Saturday.
AGL, EnergyAustralia and Origin Energy will all increase their electricity prices from July 1, adding hundreds of dollars to annual household bills. Residential customers will see an average rise of 18 per cent under AGL, 19.9 per cent from EnergyAustralia, 16.1 per cent with Origin Energy. Bruce Mountain, the head of a private energy consultancy firm, said the increases would see South Australia take the lead on world power prices — but for all the wrong reasons.
“After taxes, the [typical] household in South Australia will be paying slightly more than […]
The numbers are breathtaking. On the east coast of Australia (which means most households in the nation) they are looking at 15 – 20% increases next month on electricity bills which are already at bleeding point.
Get a grip on these numbers:
Charis Chang, News.com —
POWER prices are set to rocket after three major retailers announced increases of up to 20 per cent and $600 a year for the average customer in some states.
Origin, EnergyAustralia and AGL have all announced price increases for electricity and gas starting from July 1.
Small businesses may be the hardest hit, especially Origin customers in South Australia, which will see prices rise by a whopping $1453 a year when increases to gas and electricity bills are combined.
The biggest increase for residential customers will be for AGL customers in ACT, who will pay an extra $579 a year for a combined electricity and gas rise.
In NSW, residential EnergyAustralia customers will see electricity prices increase by up to 19.6 per cent. Origin Energy customers will get a 16.1 per cent rise.
The price hikes will take effect […]
It’s like an Easter Island moment for an advanced economy: somehow “cheap” energy can’t compete in a free market without government subsidy. A Nation of Serfs have forgotten what a free market is. Will cheap desirable stuff sell itself, or not?
The contradictions mount. Electricity and gas prices are hitting escape velocity:
The wholesale electricity spot prices was about $35 a megawatt hour during 2011, rose to $58 after the carbon tax was introduced and is now about $130 as gas prices push up energy generator costs.
Not surprisingly 70% of Australians want cheaper, more reliable electricity. Only one person in four would rather cut emissions than cut the bill. Yet the agitprop telling people that renewables are “cheap” has been so pervasive that fully 38% of Australians think the government should raise the renewable energy target, and 23% think it should stay the same. It follows that around 4 in 10 Australians apparently hold the bizarre idea that wind and solar are cheap and yet in need of government support, as if there are no investors willing to put money into supplying something that 100% of people want at a price cheaper than what they currently pay. […]
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The nerds have the numbers on precious metals investments on the ASX
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