Gas and electricity crises need deregulation not more interventions

It is perhaps a little cruel to apply the epithet, “The best energy minister we have” to the likeable Josh Frydenberg, especially since he alone with Tony Abbott actually writes his own media pieces.  In today’s AFR he writes about the unfolding gas crisis.  While he cannot blame the Queensland government, where the ALP has followed the Coalition in permitting gas exploration, he blames the ALP under Gillard for permitting too many exports and the Andrews government for forbidding gas exploration in the increasingly energy vulnerable Victoria.

Neither of these are balanced accounts of the unfolding energy disaster.

Gillard did not stop gas exports but ever since the Whitlam government restraints were undone 30 years ago, federal governments have not stood in the way of firms pursuing sales in the markets that are most lucrative.  The absence of restraints had served us well in terms of new exploration and bringing resources to the market.  In blustering about the Gillard government’s non-intervention the present government is inventing a straw man, and a dangerous one since it is now reimplementing the restraints that once brought new exploration to a standstill.

The fact is that the energy crisis concerning gas has been caused at least as much by the energy policies that have been pursued by the Coalition (almost certainly not policies that Frydenberg likes) in undermining the viability of coal generators with renewable subsidies and allowing green activism to be unchallenged.  Pushing coal generation down has meant increased demand for (far more costly gas) to supply electricity. Regulations are begetting more regulations.

It is also ludicrous to blame the Andrews government in Victoria, malevolently incompetent though that government is.  The bans on all gas exploration, not just unconventional gas, were implemented by the previous Coalition Government.  Moreover the NSW Coalition has proved to be no less Luddite than the ALP and it has actually boasted that it has closed all but four per cent of the state to unconventional gas exploration.

Australia is the richest country in the world in terms of natural wealth but its politicians, responding to elite popular opinion, continuously close off opportunities that would allow the nation to benefit from this.  Although Josh Frydenberg says he will solve the problem, so far his solution is to rob the export Peters to pay the domestic Pauls when there is massive potential to have booming exports and cheap domestic supplies.

At the very least the government should root out the immediate cause of the energy crisis by promoting the abandonment of all subsidies (including those to batteries and Snowy pumping) and penalising those state and territory governments that are denying the search for and recovery of valuable energy sources.

Governments need to go onto the front foot and promote the idea of wealth creation rather than, at every juncture, placing impediments in the way of exploration, development and use of resources like water.  As Barnaby Joyce points out in addressing the Minerals Council pusillanimity, pandering to green activists is fuelling campaigns that will  never cease applying pressure until they have closed down the activity, as they have with the timber industry.

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75 Responses to Gas and electricity crises need deregulation not more interventions

  1. Andysaurus

    I was certain that I had read somewhere that South Australia had massive gas deposits, potentially the largest of all in Australia, but that their government had banned exploration/development/extraction. Does anybody have any facts?

  2. Bruce of Newcastle

    There still is no discernible global warming occurring in the raw data, apart from events like the recent el Nino which no one seriously ascribes to CO2.

    Graph.

    As can be seen in the graph the global TLT temperature is the same now as in 2002. Yet pCO2 has risen hugely in that time.

    We also have the recent reluctant admission from the warmist climate scientists that the models are failing to match the real world, because they assume much stronger warming due to CO2 than it causes in reality. In reality CO2 doesn’t do much warming on evidence of the above temperature graph.

    So why are we destroying our economy when the actual data says there is no need to do so?

  3. don coyote

    Until 1961, Australia banned the export of iron ore due to a “short supply”.

  4. RobK

    It’s amazing that a simple matter can be made so difficult. Given the long lead times on energy policy; it is very much a case of the more they fiddle, the worse it gets.
    Now we are wasting our coal, stuffing up gas, continue ignoring nukes and like kids at a fun fare experimenting with windmills, solar cells, batteries and water wheels.
    Upto now we’ve been lucky to afford the luxury of this fetish but on present trends that will not last.
    Time for a reset, back to basics of proven formulas and work from there.

  5. Empire GTHO Phase III

    Every single individual on the public payroll who ever proposed, aided, abetted or facilitated this stupidity must be named, shamed, tarred, feathered and placed in stocks.

    The only subsidy that might be tolerated is that which provides for a generous supply of zero price rotten fruit with which to pummel the perpetrators.

  6. John Constantine

    There are massive non conventional gas reserves in the Cooper Basin, underlying the conventional gas.

    Australian extraction of non-conventional gas is far dearer than American shale operations though, so the learning curve is too long to fill the looming gap even if we start now.

    What COE Cooper is doing in Bass Strait is what needed to be started last year.

    Or the gas should have been available before the traitors sabotaged the coal plants.

  7. RobK

    Don,
    Until 1961, Australia banned the export of iron ore due to a “short supply”.
    As I understand it, iron ore was considered a strategic resource and export was banned for that reason….that in the days of heavy protectionism.

  8. rickw

    Ever since Government became interested in having “Energy Policy” energy cost and security has become a slow motion train wreck.

    It should be the case study for explaining how Government involvement in any sphere of human endeavour is a disaster 99% of the time.

  9. 132andBush


    So why are we destroying our economy when the actual data says there is no need to do so?

    Postmodernism and the green ideology which has the core belief that humans are a virus on mother earth.

  10. RobK

    China did the smart thing; continue with known technologies, experiment with the rest. Better still get others to do a dummy run to see how it goes. We put our hand up and are undertaking to do it at our expense, funded by selling resources to China and India and paying for their manufacturing capital in the experiment. Wakey, wakey Australia.

  11. Tel

    Once you have committed to exporting (i.e. signed contracts) and thus joined the global market, now you must remain in fairly close alignment with global prices.

    Every gas producer (or producer of anything) must decide whether it is more profitable to sell domestically or to export. Their decision is going to be based around price. Additional fracking in Australia will only drive down prices to the small extent that it drives down world prices, and the additional export drives up the AUD. Of course, profits are still beneficial to people in that industry and there’s some knock-on effect as well in terms of the companies paying tax and reinvesting etc. It won’t help Australian consumers though.

  12. stackja

    EXPLOSION SPARKS POWER BLACKOUT IN INNER WEST
    The Daily Telegraph
    an hour ago
    THOUSANDS of residents in Sydney’s inner west were left without power last night after an explosion at an electricity sub station sparked widespread blackouts.

    NSW Fire Brigade were called to Westfield Street, Earlwood after reports of a fire and explosion at an electricity sub station.

    The incident was the result of a circuit breaker which caused wide spread blackouts around Ashfield, Canterbury, Campsie and Earlwood areas.

  13. RobK

    Tel,
    I agree. The electricity supply system we had was coal baseload with gas and some hydro as peakers for quick response. Now we are entering a scheme where coal is taboo and the peaking gas and hydro are required to dance in tune to the intermittent renewballs. Hydro is capital intensive upfront so gas is being asked to fill the roll of baseload whilst renewballs perportedly get their act together in some massive experiment. A coal baseload regime only needs a little gas/hydro. Renewballs need lots. All the contracts for energy are long term, as are the capital requirements. We are doing this experiment too fast with unproven technologies.

  14. will

    to do it at our expense, funded by selling resources to China and India

    You understand that the exporters are paid for selling this commodity, don’t you? It is not being given away.

    and paying for their manufacturing capital

    They pay for their own capital by forgoing consumption, unlike Australia.

  15. RobK

    Will,
    Yes, we sell resources to make us rich enough to experiment with very expensive renewballs financed by RET, an impost on our domestic coal industry. We have, upto now, been paying that impost from being lucky enough to sell coal and iron ore.
    2) We buy as much renewable hardware as we can from China and India thereby helping to pay for their capital, whilst we sell them as much energy as we can.
    Of course they pay for it but we are turning our back on proven technologies, they are not.

  16. How quickly we have moved from mocking ‘preppers’ as paranoid, to being required to prepare for the coming rolling blackouts within months?.

    This summer, the consequences of Australias quisling political class signing capitulation surrender documents and locking australians in to binding international decolonisation, de-electrification, deindustrialisation war reparation payments will be blackouts for the proles.

    Get your gas bottle and gas powered barbecue so you can cook the food from your fridge before it rots.

    Get your rainwater tank.

    Get your bag of lime for the long drop dunny.

    Prepare your ‘bug-out’ bag.

    Australia, we are so rich we can do without baseload electrical reliable 24/7 power, Comrades.

  17. It is also ludicrous to blame the Andrews government in Victoria, malevolently incompetent though that government is.

    Keep at it Alan.
    Reason must prevail.

    The federalis are also malevolently incompetent.

  18. manalive

    In theory land property rights extend from the heavens to hell, but over the years that principle has been modified to accommodate air travel, subways etc.
    The internet tells me that in the US and some Canadian provinces the land owner gets ownership of “fugacious” subsurface oil and gas on extraction (“reduced to possession”).
    That doesn’t apply in Australian states where the Crown owns all subsurface resources, and there’s the problem.

  19. RobK

    John,
    Get your gas bottle and gas powered barbecue so you can cook the food from your fridge before it rots.”
    After that a sharp axe to cut wood for the campfire.

  20. Michael

    One might conclude that the federal government through its support of the RET and the state governments through their refusal to allow resource extraction are actually attacking the Australian people. How is it not insane that we sell massive amounts of fossil fuels overseas but do not allow our country to use the same resources. Why if countries can embark on major new coal fired power stations do our own governments prevent us from using proven, reliable technology? Your taxes at work.

    Michael of Sevilla

  21. Roger

    Frankly, I’m heartily sick of Josh Frydenberg’s whining and finger pointing.

    Until the government of which he is a part stops playing politics with a crucial facet of Australia’s prosperity (such as it is) and acts positively (and not symbolically) in regard to energy policy (by scrapping the RET for starters and pulling out of the Paris Agreement) they are part of the problem with no solutions.

  22. jonesy

    Pauline just follows the vote. If the vote got a bit if the resource pie coming out from under their land
    …the vote would disappear and the gates would lock out their bosom buddy green scum friends instead!

  23. Myrddin Seren

    cohenite

    And now PHON wants to ban fracking:

    It is worse.

    From Baldrick on the New Thread:

    Senator Hanson has also suggested that the Government investigate a secondary re-gasing station in Queensland that would assist shipping gas from Western Australia to the East Coast where gas would be injected into the grid.

    East Coast states are sitting on oceans of gas, and mountains of coal – and would rather bleed the country financially than upset their twisted self-worth by seeing resources actually used.

    We are vooked.

  24. zyconoclast

    Get your gas bottle and gas powered barbecue so you can cook the food from your fridge before it rots.

    I bet the price of gas bottles will spike to record highs.

  25. struth

    Please help me.
    I feel as if I am going insane.

    To my way of thinking, to still export coal for other countries to fuel their power stations but then not use it ourselves, is, I , er, mumble, sweat, giggle, shit in hands and clap, dribble, AND THEN LOOK TOWARD MORE EXPENSIVE UNAVAILABLE SOURCES especially ones that can only supply by breaking export contracts, an act of SABOTAGE.
    In war one of the first things you knock out is the power grid.

    Of course in DT’s America I would be deemed sane, but not here.

  26. rickw

    The incident was the result of a circuit breaker which caused wide spread blackouts around Ashfield, Canterbury, Campsie and Earlwood areas.

    1960’s Metrovick gear shitting itself is my guess.

  27. Roger

    Senator Hanson has also suggested that the Government investigate a secondary re-gasing station in Queensland that would assist shipping gas from Western Australia to the East Coast where gas would be injected into the grid.

    Hanson is taking political idiocy to new levels.

  28. struth

    Pauline has guts but no brains.

    We have 24 million people, maybe 7 million people with the right political leanings and brains.
    Out of those 7 million, the ones with brains and guts are too busy working to feed their families.

  29. H B Bear

    The number of Queensland LNG plants developed by the private sector completely stuffed the Australian domestic gas market. In addition to government stuff-ups at every level of this over-governed place.

  30. Delta

    At the very least the government should root out the immediate cause of the energy crisis by promoting the abandonment of all subsidies (including those to batteries and Snowy pumping) and penalising those state and territory governments that are denying the search for and recovery of valuable energy sources.

    Agreed — and abandon the Paris agreement because until that happens, everything else is akin to blowing soap bubbles in the wind for all the good it will do.

  31. Leo G

    So why are we destroying our economy when the actual data says there is no need to do so?

    The implied objectives are to eliminate the lowest cost generators by distorting the market with taxes and subsidies, and to subsidise developments for energy export.
    The resultant economic damage is the real cost of crony capitalism.

  32. John Turner

    The problem with this article and many of the comments is that the electricity grid in the eastern states is a natural monopoly. For efficiency some central authority needs to decide when and where the next supply addition should be located and what fuel source should be utilized.
    Coal reserves are in Australia are about 350 years at current usage rates. Reserves of shale oil are massive but fracking carries risks for subterranean irrigation water.
    The Australian Government needs to follow to follow the practice of the Norwegian Government.
    Oregon law professor, Christina M Wood, in her book Nature’s Trust, heeds the concepts expressed by the Founders of the Constitution of the USA, that the citizens of today, hold the earth in trust for future generations. She wrote the following;
    Some resources are so crucial to societal well-being that the cannot be privatized at all, for doing so would place them in the hands of private parties who would exploit then at peril to society.

  33. Dave Wane

    The past is the past. Governments have caused the power crisis – through unnecessary intervention in the electricity market.
    Now they think the “answer” to high gas prices and high electricity prices and unreliable supply is yet more government intervention in the market?
    Clearly the only answer is to REMOVE “governments” from the gas and electricity industries.
    In other words:
    Immediately cease all subsidies to all “renewables”.
    Declare Australia “open for business” to all electricity producers, using the fuel or method of their choice.
    Abandon all international agreements on carbon dioxide emissions. Paris etc.

  34. duncanm

    Timely article in Forbes on US gas prices and production: https://www.forbes.com/sites/judeclemente/2017/09/24/why-u-s-natural-gas-prices-will-remain-low/#b50252637835

    With marketed production increasing about 35% since 2008 to ~78 Bcf/d, prices have plummeted over 60% to around $3 per MMBtu.

    and more importantly..

    In fact, the most comprehensive liquefied natural gas (LNG) export study commissioned by the U.S. Department of Energy found that exports will NOT lead to significant increase in domestic gas prices. NERA’s 2012 study and a 2014 update here conclude that:

    “LNG exports provide net economic benefits in all the scenarios investigated, and the greater the level of exports, the greater the benefits.”

  35. Rabz

    Every single individual on the public payroll who ever proposed, aided, abetted or facilitated this stupidity must be named, shamed, tarred, feathered and placed in stocks.

    Agreed – and then after several weeks of that they should be herded into shipping containers and bulldozed off a high cliff into the sea.

  36. Nerblnob

    Russia has gas pipelines to China and is planning pipelines direct from Sakhalin to Japan and an LNG plant at Vladivostok. Australia had better wake up.

  37. cohenite

    Reserves of shale oil are massive but fracking carries risks for subterranean irrigation water.

    Because you said so? What risks? What evidence?

  38. Jungle Bunny

    Alan has a rather persistent habit of ignoring some subsidies while railing against others. It is a fact that the large scale consumers of power attracted to Australia by the Phil Lynch infrastructure borrowing program were then and remain extremely heavily subsidised. Notably the aluminium smelters at Gladstone, Tomago and Portland. If the subsidies were removed Australian power prices would be reduced by very large sums or the available power in the system increased by very large proportions (same same).
    What Alan needs to understand is that no one is going to make that error twice, even though Portland got a freebie in the most recent carryon. Private power suppliers simply won’t do those deals.

  39. Leo G

    Alan has a rather persistent habit of ignoring some subsidies while railing against others.

    Whereas you have a habit of referring to the advantage of a low long-term contract price as a subsidy.

  40. John Constantine

    Fraccing in the Cooper Basin, a decades old oil and gas province with massive existing oil and gas infrastructure isn’t going to hurt much in the way of farmland.

  41. Defender of the faith

    Leo G: not me actually. Try the Victoria state audit commission of the Kennett govt that put a multi billion number on the subsidy. As I recall it was made explicit in budgets under stockdale. Like Moran you seem to have subsidies you like, rather in the soviet style.

  42. egg_

    Ever since Government became interested in having “Energy Policy” energy cost and security has become a slow motion train wreck.

    Isn’t “I’m from the Government and I’m here to help…” the scariest words in the English language?

  43. JC

    Turner and Faith are mentally impaired.

    Turner reckons the eastern seaboard grid is a monopoly, but it’s the same grid that’s been operating since privatization. There’s been over a decade long attack coal fired power stations with every fellow traveler talking about closing them down. Coal plants have been closed down in SA and Victoria. Another large one will be soon in NSW. The problem isn’t a monopolized grid. The problem is that we’re reducing reliable supply.

    Furthermore, no one is their right mind would build or renovate a coal plant with the threats coming from the Left. You’d have to have rocks in your cranium to do so.

    Faith

    There is no possibility of constructing reliable coal power in this country without subsidy or government backing because of sovereign risk. Have you been asleep over the past 15 years with the left attacking electricity production like it was a silver cross to a vampire?

    You two are fucking nutballs.

  44. egg_

    Off shore.

    What are S.A.’s whale oil reserves?
    Cheaper than candles?

  45. Ƶĩppʯ (ȊꞪꞨV)

    El socialismo es una enfermedad mental

  46. JC

    Ever since Government became interested in having “Energy Policy” energy cost and security has become a slow motion train wreck.

    Actually here’s nothing wrong with decent government policy. Electricity production and distribution is a national security issue, so any government under our current system should and do have an energy policy.

    We used to have a policy with the overriding objective being “cheap and abundant energy”. No longer.

    What we have now is a tangled web of gerbil warming policy tangled up with energy policy. The overall result is expensive intermittent energy supply that is no longer abundant. That is the current policy and reflects exactly that in our energy markets.

  47. JC

    I have to disagree with Alan on this one for the reasons I explained above.

    Gas and electricity crises need deregulation not more interventions

    Our energy market is so crippled and investors so concerned with government blitzkrieg against energy production that we may well need intervention to cure the sickness. It’s frozen.

  48. Ƶĩppʯ (ȊꞪꞨV)

    Electricity is a natural monopoly. This weird ass attempt to bring competition to it, is well, crap. What we have are regional suppliers with “competition” in the billing dept. This is a claytons market of total bullshit.

    Delicately layered on top of this steaming pile of shit, the leftist drive towards agrarian communism, and you have the perfect turd cake.

    Really, what solution is there other then burn it down and start again.

  49. egg_

    Our energy market is so crippled and investors so concerned with government blitzkrieg against energy production that we may well need intervention to cure the sickness. It’s frozen.

    Govt intervention into the very market whose rules they set, just as Weatherdildo did in S.A.

  50. Leo G

    Like Moran you seem to have subsidies you like, rather in the soviet style

    So, soviet style (Portland) subsidy bad, non-soviet style cross-subsidy (Tomago & renewables) good?

  51. egg_

    the leftist drive towards agrarian communism,

    Hence, Bananaby’s belated conversion to windmills, following Whinger breathing down his neck.

  52. JC

    Electricity is a natural monopoly. This weird ass attempt to bring competition to it, is well, crap. What we have are regional suppliers with “competition” in the billing dept. This is a claytons market of total bullshit.

    The grid is, but production is not. The grid can be supervised by the regulator to ensure reliable distribution.

    The idea that the government could operate the grid more efficiently is laughable when you consider what would occur with the public sector unions.

    You don’t know what you’re talking about.

  53. egg_

    The idea that the government could operate the grid more efficiently is laughable when you consider what would occur with the public sector unions.

    The only reason you’d privatise a natural monopoly – an admission that you can’t control labour costs – the duplication of labour in e.g. infrastructure projects whereby you have Govt red tape employees overseeing private counterparts must still be cheaper than an expensive, slovenly 100% Govt workforce.

  54. JC

    The only reason you’d privatise a natural monopoly – an admission that you can’t control labour costs – the duplication of labour in e.g. infrastructure projects whereby you have Govt red tape employees overseeing private counterparts must still be cheaper than an expensive, slovenly 100% Govt workforce.

    Yes and it is better to have the government acting as the regulator only rather than regulator and owner, as conflict would be enormous. Public sector unions would eat us alive.

  55. JC

    I want to emphasize again that the problem isn’t grid management per se. The problem we have are left wing induced supply constraints because the left has developed an unscientific, primitive aversion to energy.

  56. Ƶĩppʯ (ȊꞪꞨV)

    The grid is, but production is not. The grid can be supervised by the regulator to ensure reliable distribution.

    The idea that the government could operate the grid more efficiently is laughable when you consider what would occur with the public sector unions.

    You don’t know what you’re talking about.

    But the grid is exactly supervised by the regulator and in fact is fractured into regional monopolies.

    The regional monopolies only buy from each other when they are short.

    The right way to do it is the government contracts out on fixed terms the maintenance and upgrade of the grid and buys electricity from competing suppliers and delivers to customers. Splitting one large monopoly into smaller regional monopolies is horse shit. Subcontract out the billing on fixed terms as well and have them all bid for the next term.

    Creating many monopolies from a large one is compounding the problem. Of course they will seek maximise return and can use a raft of accounting and sleights of hand to justify to the regulator they need permission to hike prices. There is no competition amongst the grid owners so they can signal to each other by hiking prices that they are at peace with each other. In fact as we see they leverage the green turd policies as means to maximise returns.

    Even without the green turd part of the equation and the current system is a farce.

    The government doesn’t need to run or maintain the grid, they do need to own it, for national security reasons. Either that or allow multiple overlapping grids so we have real competition, assuming you could convince anyone to even invest in building competing regional grids.

  57. JC

    The government doesn’t need to run or maintain the grid, they do need to own it, for national security reasons. Either that or allow multiple overlapping grids so we have real competition, assuming you could convince anyone to even invest in building competing regional grids.

    The last part is NOT going to occur, so you default to government ownership of the grid even when it’s not the grid that has caused :

    1. Price spikes to consumers, and
    2. Serious supply constraints.

    Furthermore you have growing intermittency problems in the grid because of renewball subsidies.

  58. JC

    I’m saddened, Zipperhead. I thought you were making progress and now look.

  59. Ƶĩppʯ (ȊꞪꞨV)

    The last part is NOT going to occur, so you default to government ownership of the grid even when it’s not the grid that has caused :

    1. Price spikes to consumers, and
    2. Serious supply constraints.

    Furthermore you have growing intermittency problems in the grid because of renewball subsidies.

    Not disputing for a second that green turd policies are shit. However the grid operators use them to justify expensive upgrades which a require return on investment as per regulator rules.

    Grid operators are also generators and right there is the underlying problem even without green turd policies, they don’t have real competition, so gaming the system is the only way to maximise returns.

  60. Yohan

    The problem we have are left wing induced supply constraints because the left has developed an unscientific, primitive aversion to energy.

    It’s not just the left JC. Most inner city chardonnay Liberals support this primitive viewpoint.

    That’s why I see no hope of things changing. Labors policy of doubling down on renewables has too much bipartisan support.

  61. egg_

    But the grid is exactly supervised by the regulator and in fact is fractured into regional monopolies.

    IIRC part of SA’s problems are that the remote windfarms are not synchronised to the grid, but “islands”.

  62. Ƶĩppʯ (ȊꞪꞨV)

    Put it in simple english. If you have competition, to drive returns you need to drive efficiency and innovation. When you don’t have real competition and some regulator allows you a good rate of return, you have a strong incentive to maximise the investments that will yield effectively zero risk high returns. It should come as absolutely no surprise to anyone with half a brain that the energy producers support green policies, which on the surface seems counter intuitive.

    If it wasn’t green shit policies they would find some other means to get access to that zero risk, juicy returns.

  63. Ƶĩppʯ (ȊꞪꞨV)

    You know JC, I am sticking my head outside dogma more and more these days and finding the air out here is a lot fresher.

  64. Yohan

    I can’t tell you the amount of people who have said to me the reason for these huge power price increases is privatization. Its a standard mantra.

    No normal person understands the concept of regime uncertainty forcing traditional power generators out. So when Shorten (and the SA government) says to reduce prices we must increase renewable’s, it resonates with the average moron.

  65. Ƶĩppʯ (ȊꞪꞨV)

    I can’t tell you the amount of people who have said to me the reason for these huge power price increases is privatization. Its a standard mantra.

    It’s partially correct, the reason for the huge pricing increase is bad implementation of privatisation. Its almost as if dogmatics think any form of privatisation is as good as any other form of privatisation. It is absolutely not. We have privatisation without real competition, that is the underlying malady. The green shit just becomes a lever to magnify the problem and bring its festering nature to the surface.

    Note how the right blame the green shit, and the left blame the privatisation shit. In the current structure they are both absolute horseshit.

  66. Yohan

    It’s partially correct, the reason for the huge pricing increase is bad implementation of privatisation. Its almost as if dogmatics think any form of privatisation is as good as any other form of privatisation.

    Its true that we don’t have real privatization, the state governments just sold off highly regulated utility monopolies.

    But this is not the main reason for the price rises. The states that still have fully public owned power markets have similar pricing to the fake privatized ones. So real privatization may have pushed prices down, but it is not the main reason for current above inflation pricing.

  67. Ƶĩppʯ (ȊꞪꞨV)

    The states that still have fully public owned power markets have similar pricing to the fake privatized ones.

    What incentive is there to push prices down? zero. zip. zilch. Anything publically owned will match private prices as it increases return to government.

    No. we have a fatally flawed design here. It needs to be killed and restarted.

  68. Yohan

    As I said Zippy, its a cause but not the MAIN cause. The MAIN cause of price rises is obviously renewables and the destruction of the coal generator market by government action.

  69. Ƶĩppʯ (ȊꞪꞨV)

    As I said Zippy, its a cause but not the MAIN cause. The MAIN cause of price rises is obviously renewables and the destruction of the coal generator market by government action.

    No. Renewables are a tool to exploit a flawed structure. If it wasn’t renewables the grid/generator operators would find other means of maximising returns by gaming the system.

    Gaming the system is the path of least resistance when you have no real competition. To innovate involves high risk, why would you do that when returns are begging to be harvested at zero risk?

  70. Defender of the faith

    JC I am wondering whether you might be one of those utility engineers who grew up in the days when no one doubted the beauty of every increment of power generation. I still recall the geniuses in the QEC who thought consumers would enjoy the lower costs that result from a bit of load management (blackouts) in return for lower capital costs. Not that they asked them. And consumers are their crutch.
    Similarly no one asked whether consumers wanted to pay extra so smelters could shift from Japan when energy prices rose.
    We’ve had a few decades of brain dead semireligious belief in the righteous power engineers and they fucked up. Now we have other religions trying to force us to use wind or sunlight or coal. Frauds. All of them. Just like the dickheads who built 500MW units when multiple fully priced smaller ones were the right choice.

  71. JC

    Put it in simple english. If you have competition, to drive returns you need to drive efficiency and innovation. When you don’t have real competition and some regulator allows you a good rate of return, you have a strong incentive to maximise the investments that will yield effectively zero risk high returns. It should come as absolutely no surprise to anyone with half a brain that the energy producers support green policies, which on the surface seems counter intuitive.

    If it wasn’t green shit policies they would find some other means to get access to that zero risk, juicy returns.

    and

    Ƶĩppʯ (ȊꞪꞨV)
    #2509227, posted on September 27, 2017 at 11:12 pm

    You know JC, I am sticking my head outside dogma more and more these days and finding the air out here is a lot fresher.

    To the first part.

    Energy producers don’t have any bias towards any production method. In the energy space they look at two things.

    1. What offers the biggest margin, and now
    2. What method to use that offers the least political friction.

    You’re now confusing energy production with distribution.

    To the second part.

    At least you’re clear on your support of government ownership. You support the enity that gave us this mess in the first place.

    Stick to watching vids on Youtube of people’s heads being lopped off.

  72. JC

    Faith

    I have no fucking idea what you’re babbling on about.

  73. Defender of the faith

    JC: exactly my point.

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