The Spectator, economic headwinds and Windwatch

The dreaded Spectator has arrived already with the last one scarcely half read. Make that a third. The editorial hit a nerve with a reference to the increasing number of people admitted to hospitals with cold-related maladies including hypothermia. Of course that is a reflection of rising power prices. An increase of 150% in the price of wholesale power in the last four years. How much longer can the talk about cheaper power from RE persist?

We have already lost an Alcoa aluminium smelter in SA, Corrected by John in comments, it is still running at a loss backed by Victoria (interesting, put up the price of power and then prop up the business for a few years!). How much smelting and heavy engineering can survive higher power prices. See the Fisher modelling, job losses under the ALP plan 200 to 300,000 and under the Coalition a lot less but still crazy.

Overseas experience indicates that a “green” job costs 3 or 4 other jobs.

There is muttering about economic headwinds, the Reserve Bank is concerned, the Treasurer and the Prime Minister are concerned, hence the attempt to be excited about reducing interest rates and timid tax reduction, but not for big business, oh no, it is ok to be a leader in taxing business.

And to be a world leader in ramping up wind and solar power. This brings us to Windwatch that is now updated daily. It is expanded to include the morning peak to see what difference the sun makes because it is up in time for breakfast, though it has gone before dinner at this time of year.

The percentage that Wind contributed to the evening peak over the last few days is as follows – going backwards from today: 7, 7, 5, 3, 10, 13, 11, 12, 4, 2 not recorded, 2.

These numbers should be front of mind of our leaders because increasing the capacity of solar adds nothing to the evening peak and even doubling or tripling the capacity of wind on bad days falls far short of the reliable 2MG that we will lose when Liddell closes. What am I missing here? This looks like a real crisis in the making.

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The Lavoisier Group, a longstanding climate realist group that I forgot about. It was being run out of the Bert Kelly Research Centre. I forgot about that as well. This a Desmog profile (for balance).

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15 Responses to The Spectator, economic headwinds and Windwatch

  1. A crisis you say?
    Bring it on. A crisis is probably the only way to wake people from their torpor.

  2. John Michelmore

    Rafe, The Aluminium smelter 50% owned by Alcoa is in Portland Victoria (not SA) and is still operating at a loss of about 50 million US last year and being bailed out by the Vic government due to high power prices and high alumina feed stock prices. You are right though the writing is on the wall after 2021 when Vic Gov bailouts could end!

  3. E Michael McKinney

    There is an alternative wind power to the three blade model.

  4. Peekaboo Minimalist Andy

    There is an alternative to the three blade wind system that may work better.

  5. Lee

    A crisis you say?
    Bring it on. A crisis is probably the only way to wake people from their torpor.

    And when it happens (and undoubtedly it will), heads should roll, and blame placed squarely on those (politicians, rent seekers, green carpetbaggers and scaremongers) who allowed it to happen.

  6. Lee

    I get sick of being lectured by sections of the media that we should follow the lead of Great Britain, for example, with regard to renewables, when they dishonestly omit the fact that Britain gets 21% of its power from nuclear, and a very significant amount from France (also nuclear).
    Of course, under the current luddite thinking in Australia we are never going to have nuclear power.

  7. CameronH

    The crisis that Venezuela faced did not change the voting patterns or government action until the situation was beyond repair. Be careful what you wish for.
    That being said, I believe we will shortly be in a serious crisis. There has been a large inherent buffer in the electricity supply system that is almost exhausted. When that runs out the repair will be at least a decade in the making. The damage to our economy, our nation, and our society will be immense. The only benefit is that the millions of economic migrants we have had with our mass immigration program over the past 20 years may all leave.

  8. The BigBlueCat

    The smelter that was closed was the one at Pt Henry in Geelong. The Portland Smelter is a joint venture involving Alcoa, CITIC and Marubeni. Power prices are linked to world aluminium prices. Not sure where power rates in terms of the cost of aluminium produced (CAP) these days, but when The BigBlueCat worked for Alcoa years ago, power was up to 25% of CAP.

    Aluminium smelters in Australia have always faced stiff cost competition from smelters elsewhere, especially in South America where labour costs are much lower. Aluminium smelters need baseload power – Pt Henry needed 360MW – and you don’t turn a smelter off in a hurry – they go 24 hrs a day, 7 days a week. Turn off a smelter and freeze the aluminium means a massive effort to restart the potlines (which usually fails anyway, so smelting pots need to be relined at massive cost). Aluminium smelters need to run continuously.

    Basically, you can’t do aluminium smelting on renewable energy. And to be competitive, power prices need to be competitive too, or the government subsidies to keep workers in a job need to be hefty. In the end, aluminium smelting in Australia is a loss-lead business. I doubt the Portland Smelter has too many years left ….

  9. What am I missing here? This looks like a real crisis in the making.

    Lee:

    And when it happens (and undoubtedly it will), heads should roll, and blame placed squarely on those (politicians, rent seekers, green carpetbaggers and scaremongers) who allowed it to happen.

    You are wrong, Lee.
    What will happen is that the people you mention above, will scream “market failure” and will demand the power supply and grid are put back in “responsible government hands.”

  10. Artie T

    The LNP are right now in the perfect position to announce a complete 180’ on power generation and water security. Pauline Hanson and Clive Palmer have got it rite. Build Hele power stations, 1 in each state. Build ore processing plants, cokeing ovens and blast furnaces near all the mines Australia wide. Sell the pure processed minerals to the world at premium prices,Coked coal pig iron, aluminium copper ingots rare earth…ect. Set up an underground bunker in the middle of nowhere to store the world’s nuclear waste and charge like a wounded bull for eternity. If we do all that we would become the richest country in the world. If the alp/green don’t agree lnp would own the mining states forever.But what’s the chances

  11. ArtieT

    When the shit hits the fan and the while country is plunged into darkness. All the past and present so called politicians and the NGO subsidies chasers should have their Gov PENSION AND ASSETS seized to pay for all the damage they have caused. And length Kailua terms.

  12. ArtieT

    I hate auto spelling.

  13. DaveR

    @BBC

    Aluminium smelters worldwide need low cost base-load power to be profitable, which is why many are built next to hydro or nuclear power sources.

    Portland was originally built on the back of a very long term power contract from Gippsland brown coal. The contract terms were always confidential, but believed to be in the 4c/kWh range. The closure of the Hazelwood brown coal station, engineered by the Andrews government, was the first step to end the industry in Victoria.

    Australians must face the reality that aluminium smelting in this country will shortly end, whether its under the Coalition’s renewable policies, or god forbid, the ALP-Greens policies. It will probably end the Alumina refinery in Gladstone as well, with Australia reduced to the status of a bauxite exporter to Asia.

    With no steel pipe now made in Australia, we are well on the road to becoming unable to maintain our basic industries without imports.

  14. Tel

    What will happen is that the people you mention above, will scream “market failure” and will demand the power supply and grid are put back in “responsible government hands.”

    Government can be one solution to the Hold Up Problem … not because government makes a quality owner of the property, but because government is a bit tougher to hold up. I’ll qualify that a bit … so many people are looking for ways to steal from government, that there’s a lot of eyes on the prize and a big chunk of capital like a power station is kind of obvious there.

  15. Lee

    With no steel pipe now made in Australia, we are well on the road to becoming unable to maintain our basic industries without imports.

    Which will result in, ironically, even more “carbon emissions” than if they were made here.

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