There are clearly better informed Cats out there, but here is something Spartacus does not understand when it comes to electricity.
The electricity value chain has essentially 3 parts; generation, transmission (poles and wires) and distribution (retailing). And it was the thrust of the electricity reforms of the 1990s that the then state owned electricity mega-structures were broken up into these 3 parts, and then within these 3 parts to foster competition. Competition in generation and competition in distribution that is. Perhaps not in transmission because there is no basis to have multiple sets of poles and wires running in parallel.
Yes. This was complicated to a degree with various State and Commonwealth renewable and emission abatement schemes, particularly the current Commonwealth Renewable Energy Scheme which is has subsumed most if not all of the other schemes. But let’s assume this away for the moment.
Over time, at least in NSW and VIC and possibly parts of SA and QLD, the state owned generators, transmitters and retailers were sold off.
Then, by some unexpected freak of nature, these sold off entities started to recombine, like mercury, but this time in private (rather than public) hands. Initially across states in retail and then across business lines into both generation and retailing; this giving Australia the 3 dominant Gen-tailers AGL, Origin and Energy Australia. So far, the poles and wires don’t seem to have been sucked up into this vortex, but perhaps that is just a matter of time.
Thus it appears, at least to Spartacus, that what started as giant state based integrated electricity generation, transmission and distribution companies have become a giant national integrated electricity generation and distribution companies. Howz that for a vision.
Spartacus can only imaging the money the lawyers, consultants, investment bankers and lobbyists extracted along the way. In some cases possibly for putting back together what they have previously pried apart. So who were the geniuses that came up with this plan?
The cost of electricity to the house, unit, factory wall is basically the sum of generation, transmission and retailing. Yet when it comes to discussion of cost, all the focus seems to be on generation. Perhaps this is because this is the area most meddled with by government. But there is plenty of crap going on in transmission and retailing.
The recent ACCC report seems to have focused on the retailing part of the electricity value chain but where is the discussion of the poles and wires? That can’t be an immaterial part of the cost of electricity? It is the poles and wires bit where the “gold plating” discussions used to happen. What happened to that?
One can only hope that the new Energy Minister, the Hon. Angus Taylor, will be able do something about the cost of energy. Although Spartacus has no research to support this, he strongly suspects that a large factor in lack of general pay increases is due to the concomitant increase in energy costs. But 20 years of policy folly and regulatory meddling won’t be fixed in 6 months.
Notwithstanding, Spartacus can’t leave these matters without an exclusive. Below is a secret video of the recent Energy Security Board (ESB) meeting. The ESB is their “official name”, but within the corridors of power, they are known as the Power Rangers. The members were carefully selected to ensure a diversity of gender and colour.