Baloney about electricity prices

You really did have to laugh at how the entirely left panel on Insiders (how is possible that Andrew Probyn is now on the ABC aka taxpayer payroll – is this some kind of joke?) stumbled their way through the explanation of the load shedding that occurred in South Australia last week.  (According to shadow minister, Mark Butler, just a “hiccup”.)

If you read the Guardian, Fairfax or listened to the ABC in the past few days, all their commentators were praying for load shedding to occur in Sydney so they could all go – “See, nothing to do with renewables”. Sadly, for them, load shedding was avoided so that argument is dead for the moment.

You did have to laugh when LaTingle immediately lept to the point that it had nothing to do with renewables but then had to backtrack – well, it is complicated (a point made by fellow green traveller, Lenore Taylor, who laughably thinks she is quite the expert on this stuff.)

And what about the suggestion that it was all AEMO’s fault because it didn’t switch on the gas power plant at Pelican Point?  Excuse me, AEMO doesn’t run electricity generation and PP didn’t bid in because it couldn’t supply (an entirely sensible rule).  And it is not just a matter of switching it on – it takes several hours and there needs to be feeder stock as well.

But the answer of the panel was clear: the supply was not forthcoming because they could make heaps of money by not supplying but pushing up the price.  You know it makes sense – PP didn’t bid because it couldn’t supply, but the price was bid up and the plant made money by not supplying.  That must be the entire explanation.

And here’s a point that the greenies fed Barrie: there have been more peaks in wholesale electricity prices in Queensland than SA this year – therefore nothing to do with renewables.  Of course, this is just spin.

The peaks generally last a very short time and the key is average electricity prices.  Here are the figures for 2017:

South Australia         $105.05/MWh

Queensland                 $93.56/MWh

NSW                              $73.48/MWh

Victoria                         $47.14/MWh

Now if you think last week was bad, just wait until next summer when Hazelwood is shut down taking 20 per cent of baseload from Victoria.  In this case, the interconnector won’t be much good for South Australia because there will be no power to export from Victoria.

And to think that the SA government still thinks another interconnector to NSW (many hundreds of millions of dollars and several years away)  is part of the solution.  Hilarious.

The SA government is about to add another major distortion to the market by awarding a monopoly contract to an energy supplier, most probably gas, for which a generous long term take-or-pay arrangement will apply for all the electricity used by the public sector.  I’m presuming this includes hospitals, schools, universities, goals, etc. as well as the public sector.

But here’s the bit I really like: by awarding a monopoly contract to this entity, there will be more competition in the market.  You know this makes sense too.

That it is likely to flout the rules of the AEMO as well as COAG agreements seems neither here nor there to a desperate SA government.

Mind you, demand management is unlikely to be an issue in that state as the last big industrial factories close down – and soon.

Tom Quirk has a very good commentary in Quadrant online.

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60 Responses to Baloney about electricity prices

  1. classical_hero

    When will there be an uprising?

  2. Crossie

    By persisting with the Insiders program the ABC is being insensitive and not keeping up with the times or reflecting community attitudes, but then again it never has. The idea of insiders and outsiders was what drove the last election and is likely to do so even more at the next election. Peggy Noonan’s Wall Street Journal article went one further with “protected” and “unprotected” labels.

    Pushing renewal energy just widens the gulf between the insiders and outsiders, the insiders being those who have the money to invest in subsidised renewables and outsiders being the consumers who pay the price.

    I have said this before, whoever campaigns on reliable and cheap coal-generated electricity will win next election. Voters are not as stupid as the “protected” think.

  3. Rasputin

    I’m surprised that none of them suggested that the SA Government should put wind turbines on their electric trains and trams so that they can generate their own power! That should at least give some security to the transport sector as we go to 110%renewables! In fact they could be the Neo-gasometer of the war years.

  4. Tel

    Eeek!

    NSW is up to 7c per kWh… it was down around 5c only a few years back. Requires constant attention just to keep up with the way these prices are skyrocketing. Good thing official inflation figures are so low.

  5. Grigory M

    load shedding was avoided so that argument is dead for the moment

    Incorrect, Judith – load shedding and widespread blackouts were avoided in NSW on Friday only because AGL Energy forced Tomago Aluminium to cut production – which they did, but they were not happy about it.

    The record-high electricity demands forced AGL Energy to cut power to a large aluminium smelter in the state’s Hunter Valley in order to avoid mass electricity blackouts across the state.

    The Tomago aluminium smelter near Newcastle consumes 10 per cent of the state’s electricity.

    AGL said that if power to the smelter had not been cut, there would have been electricity cuts to schools, businesses and homes across NSW.

  6. Judith Sloan

    Do we believe AGL? Green rent seeker extraordinaire.

  7. Tel

    AGL Energy forced Tomago Aluminium to cut production – which they did

    Yeah, they did the load shedding in advance, using this thing called “planning”.

  8. Tel

    PP didn’t bid because it couldn’t supply, but the price was bid up and the plant made money by not supplying.

    You are going to find it rather difficult to convince Green voters that it’s impossible to get paid for not working.

  9. Grigory M

    Don’t see why not, Judith – Tomago Aluminium confirmed the cut back and that it was directed by AGL Energy for the reason stated.

    And:

    And what about the suggestion that it was all AEMO’s fault because it didn’t switch on the gas power plant at Pelican Point? Excuse me, AEMO doesn’t run electricity generation and PP didn’t bid in because it couldn’t supply (an entirely sensible rule). And it is not just a matter of switching it on – it takes several hours and there needs to be feeder stock as well.

    They had no problem “switching it on” for the peak demand period on the ensuing two evenings.

  10. Bruce of Newcastle

    And to think that the SA government still thinks another interconnector to NSW (many hundreds of millions of dollars and several years away) is part of the solution. Hilarious.

    The possibility of load shedding here in NSW was because demand is rising as the population does (all those apartments with nice new airconditioners…ever been in an apartment in summer without an aircon?) Meanwhile the state government is letting baseload power stations shut: Wallerawang 1,000 MW in 2014 and Munmorah 1,400 MW in 2012.

    It was only because AEMO persecuted the Tomago aluminium refinery on Friday that the lights stayed on.

    Tomago aluminium smelter ‘on the verge of disaster’ as electricity cut off

    It’ll be interesting to see if AGL closes the 2,000 MW Liddell power station this year as has been mooted. We’ll all be mushrooms then.

  11. Adelagado

    I quite like Probyn’s segments on 7.30 so far. He at least has real journalistic experience and hasn’t yet dropped into blandly reciting ‘the bleedin obvious’ that is often the M.O. of most ABC talking heads. A little bit of sarcasm nicely spices up a report. Chris Uhlman had that edge for a while but seems to be losing it.

    The animosity between the growing of band of struggling, privately/self employed journo’s and those riding the ABC gravy train will be entertaining to watch over the next few years.

  12. Bruce of Newcastle

    Beat me to it Grigory! 😀 Although I was chasing the supporting data as well.

  13. miltonf

    Mugabe strength economic destruction.

  14. Dr Fred Lenin

    When is the next election inSA ? Is there an opposition party there ? I have never heard of any unless like Victoria its the invisible party ,you know the one you never hear of ,who co operste with the left media so well theynever get a mention . Its time the media party became legal by standing for election like the polliemuppets do ,this backroom rule sucks .
    Seriously,this electricity fiasco is a winner for any party that exposes the huge scam ,a real winner and promises to destroy it a real winner,a real Trumper.

  15. Tel

    It was only because AEMO persecuted the Tomago aluminium refinery on Friday that the lights stayed on.

    Simply executing their contractual rights under the circumstances.

    I’ll bet you I pay top dollar compared to Tomago… if they want to bid higher, by all means let them renegotiate a contract at residential rates.

  16. Bruce of Newcastle

    Yep, let’s bankrupt Tomago, send all the refinery capacity and jobs to China where they can produce the aluminium less efficiently with more CO2 emissions and then produce even more CO2 shipping the aluminium back to Australia. Sounds like typical green hypocrisy.

  17. Judith here are the AEMO January Av RRP from here – you have to choose Jan 2017 to the right down the page.
    http://www.aemo.com.au/Electricity/National-Electricity-Market-NEM/Data-dashboard#average-price-table
    DATE REGION AVGRRP $MWhr
    2017/01 NSW 82.69
    2017/01 QLD 197.65
    2017/01 SA 84.26
    2017/01 TAS 86.11
    2017/01 VIC 62.04

    and here the av for first 10 days Feb. Rounded to even
    NSW 314
    QLD 354
    SA 333
    TAS 102
    VIC 102

  18. Leo G

    Mugabe strength economic destruction.

    The situation can only worsen over time.
    Wind turbines gradually lose effectiveness over time- typically load factors drop by half in less than 15 years. Coal-fired generating plant, by comparison, can typically maintain effectiveness for up to 45 years.

  19. 132andBush

    Wind turbines gradually lose effectiveness over time- typically load factors drop by half in less than 15 years.

    What is that a function of?

    Downtime for increased maintenance?

  20. miltonf

    I understand solar cells degrade over time.

  21. H B Bear

    Andrew Probyn used to regularly fellate ALPBC 720 Perth Nana Hutchison on Friday mornings for ages (certainly metaphorically). Nana’s position on the loony Green-Left spectrum can be gauged by the fact that even the limp lettuce brigade at ALPBC management had to delete his private Twitter over an abusive post on John Howard.

    Having established his Green-Left credentials he now wins journo Lotto and scrambles aboard the staff co-op and attaches himself to the taxpayers tit, free of any market forces for the rest of his life or a six figure pay-out whichever comes first.

  22. H B Bear

    Incorrect, Judith – load shedding and widespread blackouts were avoided in NSW on Friday only because AGL Energy forced Tomago Aluminium to cut production – which they did, but they were not happy about it.

    Large industrial users often have agreements with electricity retailers to cut demand during demand spikes and receive payments for doing so. Do we know whether Tomago has such an arrangement with AGL?

    The WA government is trying to get out a series of these demand management contracts which have cost WA taxpayers tens of millions of dollars and have never been needed as higher prices reduce demand growth and make rooftop solar more viable.

  23. herodotus

    And to think that the SA government still thinks another interconnector to NSW (many hundreds of millions of dollars and several years away)  is part of the solution.

    No. Just No.

  24. H B Bear

    Is it any wonder that Mr kd wrong and Mainland Tasmania whose economic policy is a begging bowl and a ticket to Canberra are looking to a beggar-thy-neighbour solution on electricity too?

  25. Mark M

    I call baloney on Hazelwood being a ‘dirty’ power plant.
    The fish are good enough to eat:
    “Testing has revealed the fish, which have grown in the shadow of one of the country’s dirtiest power stations, are safe to eat.”
    http://www.abc.net.au/news/2016-12-09/no-crocs-no-waves-but-plenty-of-barramundi-victoria-hazelwood/8108306
    The fish have plenty to eat; Lots of bugs because the bugs have plant food to eat, because of carbon (sic) and a favourable climate:
    “There’s been food in abundance for the barramundi, so they’ve been growing at an enormous rate of knots,” she said.
    http://www.abc.net.au/news/2016-11-07/hazelwood-pondage-short-lived-barramundi/8000988
    Nothing dirty there.

  26. Our Green Betters are probably glad that a 590,000 tonne a year smelter is under threat.

    Aluminium is so naughty that they can’t wait to get on board a huge jetliner made of aluminium and filled with tens of thousands of litres of kerosene so they can attend their next conference to discuss how naughty aluminium and oil are.

    Don’t worry. We now have this really butch Australian government which has been gung-ho about reliable energy for…oh, several days at least. (They’re not admitting it, but the Wentworth weekday tennis ladies are secretly stirred by the new red-meat Malcolm.)

  27. Tel

    Large industrial users often have agreements with electricity retailers to cut demand during demand spikes and receive payments for doing so. Do we know whether Tomago has such an arrangement with AGL?

    Yes we do know; yes there is an agreement. Without a doubt there would be some price advantage offered to Tomago in exchange for lack of continuous supply.

    The commercial agreement has been in place with the smelter since 1991 and exists to give flexibility to AGL to manage its customer load during plant outages. In exchange for this flexibility, the smelter has gained commercial benefits under its supply contract.

    This type of arrangement is common with smelters in Australia.

    Since AGL’s ownership of Macquarie Generation, curtailment has been enacted four times, including yesterday’s curtailment of three hours and 20 minutes.

    With temperatures reaching above 40 degrees and high humidity in New South Wales today, AGL anticipates that energy demand will be high.

    The Bayswater Power Station is running at full capacity. The Liddell Power Station has been undergoing unavoidable maintenance due to boiler tube leaks and has two of its four units running at full capacity. A third unit is planned to return to service this afternoon in time for the peak demand, and the fourth unit is returning to service on 13 February.

    It is perfectly sensible to prioritize loads… equivalent to what I was saying the other day about airline booking and the difference between the students with standby tickets and the business owner running later for her interstate meeting.

  28. Linden

    anyway for a the comments it’s still heaps more expensive that what they have to pay for it in Pakistan

  29. Leo G

    What is that a function of?
    Downtime for increased maintenance?

    Various studies have shown that a wind turbine will typically generate about twice as much electricity in its first year than In its 15th year.
    Windfarms adapt to this prblem using practive upgrades so that overall windfarm efficiency decline is more modest.

  30. Habib

    Lotsa talk there about SA failures, Vic & NSW to follow suit, how about the question as to why Qld average price is twice Victorias? More coal than politician brain cells (a lot more), so why are we being cornholed? Just got a quarterly bill for the rough end of $1500, for 2 people and a dog. This country would have to improve markedly to be classified as a shithole.

  31. egg_

    load shedding and widespread blackouts were avoided in NSW on Friday only because AGL Energy forced Tomago Aluminium to cut production

    Disingenuous, as usual – the Generators admitted they had excess for the Grid that afternoon.

  32. egg_

    The Bayswater Power Station is running at full capacity. The Liddell Power Station has been undergoing unavoidable maintenance due to boiler tube leaks and has two of its four units running at full capacity. A third unit is planned to return to service this afternoon in time for the peak demand, and the fourth unit is returning to service on 13 February.

    Whose @rse should be in a sling during peak demand – or playing politics?

  33. Roger

    the Generators admitted they had excess for the Grid that afternoon.

    That’s what I heard. The operator of the smelter was quite cranky at having to shut down too.

  34. john constantine

    Big Australia, with de-industrialisation allowing the economy to power along by mass importation of client herds to be serviced by social justice service providers and the whole thing tilting at windmills for light and spark, will be an interesting lesson in avoidable idiocy for future generations.

    Another Adelaide worth of people will be imported by 2021 or 2022, just in time to see the shortfilth triumphantly dynamite the last coal powered stations and open the brand new union built,owned,operated and maintained windmills [all on guaranteed cost plus profit government contracts.]

  35. Tel

    Whose @rse should be in a sling during peak demand – or playing politics?

    Egg, those turbines are older than I am, and I’ll admit my boiler tube ain’t what it used to be. Seriously, there’s been this long trend of refusal to invest in coal fired power stations and so it is starting to show.

    They are designed for 40 years service. After that ymmv.

  36. Zyconoclast

    how is possible that Andrew Probyn is now on the ABC aka taxpayer payroll – is this some kind of joke?

    This is how.


    Andrew Probyn and award winning asylum seeker stories.

  37. Squirrel

    Clearly the solution is to retro-fit the desalinations plants with a hydro-electric facility – use the solar power to pump the water up, somewhere(???), and then when the wind stops blowing, and the sun stops shining, let the water run down and generate the power to keep progressive homes cool and light (or warm, as the case may be).

    This surely has the potential for a virtuous circle of clean, green energy, and will be the basis for a world-leading green industrial revolution which could see South Australia earning so much money that it could start subsidising the rest of the nation……

  38. egg_

    there’s been this long trend of refusal to invest in coal fired power stations and so it is starting to show.

    Why not perform maintenance during ‘shoulder months’ rather than peak demand?
    As if they don’t periodically inspect and report on infrastructure such as boiler tubes, FFS?

  39. H B Bear

    Seriously, there’s been this long trend of refusal to invest in coal fired power stations and so it is starting to show.

    Who would want to own or finance a coal fired power station in Australia? There is so much sovereign risk attached to them already and that is before you even contemplate the lawfare to obtain approvals. You can’t build 30 or 40 year assets that are subject to the whims of a 3 year electoral cycle.

  40. rickw

    The living standard of any society is defined by the cost of energy and the available technology.

    These tools are taking a wrecking ball to one of our key foundations.

    (I have said this before, Imperial Rome is a classic example, water engineering projects delivered them vastly more energy than their rivals.)

  41. Some History

    The latest remedy for “hiccups” is candles.

  42. Art Vandelay

    how about the question as to why Qld average price is twice Victorias? More coal than politician brain cells (a lot more), so why are we being cornholed?

    Probably because Queensland’s power system is government-owned whereas Victoria’s was privatised a long time ago.

  43. Waz

    <blockquoteAnd to think that the SA government still thinks another interconnector to NSW (many hundreds of millions of dollars and several years away) is part of the solution. Hilarious.

    Judith is out by quite a bit on this assumption. A $1m pre-feasibility was announced for this interconnector in June last year with a ball-park thumb suck cost of $500m. In practice it requires an easement over vast tracts of private and western lease land. There is NSW legislation for such easements to be created compulsorily but it would be very politically difficult if a bunch of farmers decide to play hard boil and say why should we have a transmission line across our property to supply a mendicant state. I think the permitting for such a line would be a minimum of 5 years.

  44. Irreversible

    Judith, I think you hit on it when you highlight the peaks. This has been the emerging problem for some time. We have a market in which industrial (base) load is shrinking, while intermediate and peak loads are rising. Base load is where coal fits. Gas, hydro and pump storage are typical supply sources to the peaks and intermediate loads. We don’t have enough of the latter. But we do have quite a lot of the former. (Though the fact that no one will build a new one means that we will have a problem there at some point.)
    We also have a rather serious problem with gas reserve management, putting aside the debate over unconventional gas. There is quite a lot of gas in Australia but much of it is either being squatted or is not able to access pipeline.

  45. classical_hero

    Mark M, it would be interesting to see what happens to the fish stocks after Hazelwood gets shut down. My prediction is that they’ll suffer as a result of less food being available. The Greens actively hate the planet.

  46. Mark M

    @classical_hero, #2294128, posted on February 12, 2017 at 6:59 pm …

    It appears the green anti-coal policies are a thousand times more deadly to the fish’s environment than the power plant.

  47. miltonf

    Certainly deadly to birds and bats. Truly evil. And it doesn’t work.

  48. Muddy

    The animosity between the growing of band of struggling, privately/self employed journo’s and those riding the ABC gravy train will be entertaining to watch over the next few years.

    Off topic sorry, but right there is a possible opportunity for undermining certain sections of our anxiety-porn industry (media).

  49. It’s a known fact that the vegetated areas around coal fired power plants are lush and healthy. Cool air settles near the ground overnight fertilizing the vegetation with the CO2 from the power plant. One finds similar around the sides of major roads where trees thrive due to the “pollution” created by motor vehicles.
    Plant life thrives on most of the “pollution” created by animal life including CO2 exhaled by animals. It’s a symbiotic relationship that alarmist azzholes just will not accept.

  50. a reader

    The SA opposition is more interested in touting it’s plan for a 24 hour cargo airport more than 100km from Adelaide. I mean WTF

  51. Andrew

    a reader
    #2294392, posted on February 12, 2017 at 11:48 pm
    The SA opposition is more interested in touting it’s plan for a 24 hour cargo airport more than 100km from Adelaide. I mean WTF

    They already have Avalon

  52. Combine Dave

    The SA opposition is more interested in touting it’s plan for a 24 hour cargo airport more than 100km from Adelaide. I mean WTF

    There’s no reason why building an economy boosting airport should preclude investing is sustainable baseload power – aka coal.

  53. Tel

    The SA opposition is more interested in touting it’s plan for a 24 hour cargo airport more than 100km from Adelaide. I mean WTF

    Worst comes to worst they can airlift in the electrons.

  54. Diogenes

    It appears the green anti-coal policies are a thousand times more deadly to the fish’s environment than the power plant.

    Quite so. According to colleagues when the Munmorah Power station was shut down, there was a largeish unreported fish kill in Lake Munmorah, and a smaller one in Lake Budgewoi as the water temp dropped quite suddenly when the warmer ‘cooling’ water was no longer pumped in.

  55. Eyrie

    I posted this on the OT. Australia punching above its weight. Most expensive electricity per renewables per capita in the world.
    https://wattsupwiththat.com/2017/02/10/claim-new-green-danish-facebook-data-centre-will-increase-co2-emissions/

  56. Vicki

    We watched that segment on Insiders & were gobsmacked. It is so frustrating to hear such garbage.

    Unfortunately, electricity generation is now so complicated by the mix of renewable ideology, “gold-plating” of infrastructure, part privatisation of some states and some sectors of electricity supply in other states, a grid complexity through interconnectors & supply based on algorithms, that it is nigh impossible for the public to comprehend it all.

    All the public knows is that it is incredible that in a technological age we have trouble getting reliable electricity supply. And don’t think that this is confined to SA. On our farm in the Central West tablelands of NSW we are often subject to daily power loss through blackouts – all unannounced.

  57. Tim Neilson

    This idea that people can make money by not selling seems very strange.

    Last time I looked AEMO delivers on all demand by accepting lowest bids by producers, then next lowest and so on till they have bought enough to meet demand. So a producer would have to be insane not to bid all their capacity every time. If they bid some of their capacity at the astronomical price caused by “renewable” failure, they simply aren’t going to push the price down by bidding all their capacity at that high price. The market simply doesn’t work like that.

    Unless someone can explain to me why I’m wrong, I’m going to assume that the “the greedy capitalists refused to supply” meme is just another disgraceful green/left falsehood designed to shift blame from their own imbecilic megalomaniac vandalism, fuelled by their hatred of ordinary Australians rather than any genuine concern for “the environment”.

  58. Bob in Castlemaine

    Spot on Tel supply interruption agreements have been around with large power users, Alcoa in Victoria had such agreements going back for at least 45 years. I think it was in those days a half or one hour interruptibility agreement. The problem back then in more rational times was more a short term contingency to help cover the trip of a large generator until spinning reserve could replace the capacity of the tripped unit without load shedding general customers. The trouble is in SA and soon elsewhere it increasingly becomes an energy problem without access to adequate dependable spinning reserve to replace lost generation and with intermittent wind generation this kind of joke can go on for hours.
    Just fire up a gas plant, or start a coal generator the watermelons say, well sorry they’re all being forced out of business by subsidised wind and as H B Bear #2294063 explains no one with half a brain is going to lend serious money for a project where continued profitability is increasingly at the whim irrational political opportunists. The patch-up job may well be yet more subsidies this time for fossil fuel plants to sit idle in case (read when) the wind and solar go walk-about.

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