Australia’s new energy policy and its dishonest depiction

The government’s electricity “reforms” merely confirm the existing subsidy arrangements for renewable electricity, with consumers paying the renewable tax till 2030.

Its “reliability guarantee” adds no greater certainty but will entail a vast new inflexible bureaucracy.

The measures will not result in the forecast lower prices.

Here is a piece of mine just published in Quadrant.   In it I conclude

Josh Frydenberg must understand these deficiencies of the energy policy he is marketing. Presumably his nightmare is that unless the present situation is stabilised, the renewables share will be further boosted, and the economy ruined, by the high prices and diminished reliability this entails.

But in stabilising the renewable energy at its present and 2020 projected level we can be certain that Australia’s former comparative advantage in energy costs — the very same advantage present policies have destroyed — will not be restored and our living standards will be very much lower than they would otherwise be.

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30 Responses to Australia’s new energy policy and its dishonest depiction

  1. teddy bear

    What do they care, nothing will ever affect them.

  2. mh

    Australia needs real leadership

  3. Mark M

    First building to go without air-conditioning should be parliament.
    When ever there is a black out anywhere in Australia, turn off the a/c in parliament.

  4. min

    Just posted this as well as Dr Michael Crawfords assessment of the NE G to Josh along with when it does not work to lower prices now MT will blame hm and his career ruined. Happy blackouts everyone Bolt has the numbers that Vic needs and what power is available .

  5. Rossini

    No matter how much electricity cost the pulic in general, it wont effect MT at all.
    To most politicians electricity is a small expense on their generous salaries.
    Can Abbot be Australia’s Trump. If so he should grow some balls and give MT a kick where it hurts.
    Who cares if MT resigns from parliment.

  6. egg_

    Josh Frydenberg must understand these deficiencies of the energy policy he is marketing.

    Just a would be slick spin doctor – ruiNation here we come.

  7. Neil

    Electricity prices are exploding but Australia wants the ALP back in govt to fix the problem

  8. jonesy

    I’m listening to question time….and I cannot tell the difference between sides! Butler is belling the cat on the reintroduction of carbon trading….a Frydenburg just lists off the litany of lefty Alphabet groups that support the NR…G…geeesus, some bright young thing in the PMO must have took weeks to come up with that little gem…and then another month to come up with a policy to match this catchy little play on messaging.

  9. Speedbox

    Electricity prices could easily be THE major topic at the next election. If, by then, the average household is routinely receiving quarterly bills of $800+ (despite being as economical as possible), the game will be over for Turdbull. And yet, look at the alternative under the Peanut.

    This country is buggered.

  10. sabena

    Its so depressing.
    What is wrong with these people?
    The reliability guarantee is good policy.
    The renewable energy guarantee is extremely bad policy.As Alan Moran has said elsewhere,the claim that renewable energy costs are coming down is nonsense-they will never be as cheap as other sources.Do we have to wait before unemployment is at 20% plus before they get this?

  11. Rob MW

    I reckon that this whole electricity debacle by the Liberals & the opposition Liberal Liberals and the opposition Liberal, Liberal, Liberals is a conspiracy to force everyone to buy their own gen-sets and provide their own power. I can just see tourists driving through a town, or city, with the windows up, air-con going full blast and wearing a pair of ear muffs so they don’t go deaf from all the noise.

    Either that or they are plain fucking stupid. Q – how is the world supposed to be saved if the saviours are all fucking stupid ?

    Could stupid people have saved Apollo 13 ?

    How much angrier do these stupid people want all normal people to be before the stupid people realise that when they look in the mirror they are looking at a really fucking stupid person ?

  12. Neil

    I reckon that this whole electricity debacle by the Liberals & the opposition Liberal Liberals

    My understanding is that power is a State govt responsibility unless you want the Feds to take over everything

  13. Dr Faustus

    Typically with most policy over the past 10 years this has been worked out on the back of a fag packet. There is no supporting detail or modelling involved, just 8-pages of fairly general observations from the Energy Security Board (ESB) – an organisation formed only a few weeks ago.

    As Alan notes in Quadrant, the ‘Wow’ reception will be tempered as the bureaucrats close in with the rent-seekers to flesh out how all these guarantees might work – and what it will all cost Australia.
    The one certainty is that Turnbull, Frydenberg, Morrison have no idea what they are selling.

    While the details are up in the air, there are a few obvious pointers in the ESB document:

    Reliability Guarantee
    AEMO has thrown its hands up with the existing NEM ‘reliability standard’ (which allows 0.002% of the annual regional consumption to be ‘at risk’). The amount of renewables attached to the system makes this unachievable – however, rather than beefing-up system reliability, the plan is to actually reduce guaranteed reliability through cunning plans and secret electricity business.

    AEMC/AEMO will devise alternative, ‘dynamic’ (and presumably lower) regional reliability standards which will form the basis of the retailers’ dispatchable electricity obligations.

    The likely outcome will be a national demand management scheme, where retailers are able to drop a sizeable chunk of their markets when the going gets tough; voluntarily through smart meters and premium ‘always-on‘ tariffs versus ‘off whenever‘ tariffs, and involuntarily via load shedding.
    The upshot is that Australian electricity consumers can forget that old fashioned notion of power just being available in the wall when they need it. So inefficient and 1990’s.

    Emissions Guarantee
    Yes, theoretically technology agnostic, but the fragmentation of responsibility to acquire low emissions despatchable electricity – and presumably penalties for failing to do so – will necessarily mean a proliferation of smaller-scale, quick-to-market projects that are less likely to be held up in planning/green lawfare. This will be the breeding ground for the spread of inefficiently-scaled gas, battery and pumped storage projects.

    I guess it is possible that someone might see an investment opportunity in a merchant coal project (at $120+/MWh the economics would look pretty amazing) – but given lawfare, rent seekers occupying 60% of the retail market they would need a massive balance sheet and balls of steel.

    This uncoordinated approach to technology – combined with mandated competition for the diminishing dispatchable power in non-retail hands – guarantees prices will be higher than would be found in a free market.

    Forward Price
    The Government is already lying by implication about reductions in power bills.

    The ESB suggests (on a no evidence basis) that wholesale prices “would be expected to be lower relative to today and lower compared to a certificate-based scheme“. This may be true, but the residential bills will fall by $110-115/annum schtick is political spin.

    The ESB suggests that saving in 2020-2030 as a reduction against the forecast price on the current trajectory – not against the bills of today. Given that prices are going to go up sharply as most of the Eastern coal-fired generators are retired and gas prices increase with demand, this is a projected ‘saving’ on a substantially increased base.

    There is no evidence of any relief in consumer prices.

    [Sorry long and rushed]

  14. Rob MW

    My understanding is that power is a State govt responsibility unless you want the Feds to take over everything

    Your full of it mate. The commonwealth took over the whole electricity thing more than 10 years ago through the adoption, via ‘External Affairs’, of international (UN) conventions limiting global CO2 emissions’. Understanding this and your half way their comrade and until then, post your own original comment instead of relying on someone else to give you a head start.

  15. manalive

    … this whole electricity debacle by the Liberals & the opposition Liberal Liberals and the opposition Liberal, Liberal, Liberals is a conspiracy to force everyone to buy their own gen-sets and provide their own power …

    At least the diesel generator market looks promising.
    It’s a bad sign, so far Turnbull’s brilliant sensible-centre plan has been praised by faint damn from the usual suspects.

  16. Speedbox

    Electricity supply is a State Government issue however the Federal Govt hand out the massive subsidies to the renewable “industry”, impose the Paris Agreement requirements, throw a massive sum at Snowy Hydro #2, standby whilst some State Govts prohibit gas and coal exploration and mining (despite it clearly being in the national interest) and in doing so, presides over entire sectors of some industry struggling to remain viable due to rising energy costs. That stance has already led to unemployment (see Plastic Granulating Services, Adelaide) amongst others and more will follow.

    Abolish the subsidies now, slash the red tape and tell Paris to go jump. Australian industry and households come first.

  17. Neil

    Electricity supply is a State Government issue however the Federal Govt hand out the massive subsidies to the renewable “industry

    Don’t the Sate govts give out Solar rebates. Do people really wants the Feds to take over everything?

    Why is SA so different to other States?

  18. Snoopy

    It’s not all bad news.

    Some in the fledgling tech-metals mining and processing industry are dismayed that the Federal Government’s new energy policy does not appear to support renewable energy storage such as batteries.

    Australian Vanadium chief executive Vincent Algar said the National Energy Guarantee (NEG) unfairly pitted the batteries and renewable energy storage sector against fossil fuel electricity producers such as oil and gas.

    “With coal and gas considered a dispatchable energy source under the NEG, what incentive will there be to source dispatchable energy from a battery?” he said.

    Three minutes of electricity is not dispatchable energy. Sorry.

  19. Gengis

    Josh Frydenburg should re-read his maiden speech where he promotes Nuclear Energy. What’s with this Liberal Party that they cannot talk about it. Let the Greens and Labor go crazy, but the average punter is catching on fast that they are losing jobs and power blackouts loom. Then MT wants ‘eccess’ power for his stupid pumped hydro – what excess power?

  20. Major Elvis Newton

    Josh Frydenberg in today’s Australia:
    “…As for emissions reduction, the Turnbull government takes seriously its Paris commitment, which is a commonwealth responsibility. Under the new initiative, the commonwealth will legislate the target and retailers will be required to have an average emissions level across their portfolio. They can use existing contracts to meet this obligation, potentially including international permits and domestic credits…”
    This is an emissions trading scheme.
    Turnbull promised one and here it is…

  21. Rafe Champion

    Better start planning for blackouts.
    Where to get old-fashioned manual typewriters and ribbons?

  22. hzhousewife

    Better start planning for blackouts.
    Where to get old-fashioned manual typewriters and ribbons?

    Reminds me of the teacher that reassured me that kids didn’t really need to learn to write legibly because keyboards (Year 4 when my kid was 9 or so – helped me to decide to move schools, about 1999).

  23. Rafe Champion

    Typewriter ordered from ebay, now to improve my touch typing so I can write in the dark.

  24. John Constantine

    The great transnational looting Class gets to print carbon currency and swap it for Australian dollars.

    Still cheaper than ruinables. Should have just bribed the Cartels in the first place.

  25. Dorothy

    My work relies on frozen food, if we have power cuts and I loose all my frozen food I will just have to give up as I will loose thousands of $’s
    I am so angry with the liberals, and to listen to them being interviewed by Bolt etc is frustrating in the extreme, Mat Canavan and Barnaby Joyce two examples, I wanted to put a brick through my TV
    Our only hope is Tony Abbott

  26. Neil

    I am so angry with the liberals,

    My understanding is that power is mainly a State govt responsibility. Do you want the Feds to take control of everything eg schools, hospitals, building roads in Sydney?

  27. OneWorldGovernment

    Rafe Champion
    #2527621, posted on October 19, 2017 at 5:02 pm

    Better start planning for blackouts.
    Where to get old-fashioned manual typewriters and ribbons?

    You can possibly still get 256 Baud modems.

    As long as your phone still works!

  28. Rob MW

    Typewriter ordered from ebay, now to improve my touch typing so I can write in the dark.

    I think the Royal Blind Society sell pretty good braille typewriters. Not sure whether eBay has them Rafe but worth a search 🙂 …… oh wait….. 🙂 can computer power be generated by braille or do we have to wait until the wind blows or the sun to comes up.

  29. Bruce of Newcastle

    Alan – Don’t miss this article over at WUWT today.

    DOE Secretary Rick Perry: “Resiliency Pricing Rule” for Coal-fired and Nuclear Power Plants

    The title while accurate is unfortunate since almost all of the article is actually about our Australian energy woes and the costs of wind and solar when battery load levelling is included.

    Highly recommended that you and Judith have a read of it (it includes a version of the graph that Judith included in her recent Oz article).

  30. John Constantine

    If you obviously display too much ‘off-grid’ energy independance, you will make yourself a target for either apex gang style home invasion, or government inspection for compliance with the Regulations, and confiscation of non-authorised and un-permitted property.

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