Victoria setting new lows in energy policy

I have a piece in the Spectator on Victoria’s  announced  intent to go much further than the federal government in requiring the substitution of renewable energy for the much cheaper and more secure energy that is provided from its endless supplies of high-quality brown coal.  Compared with the national policy of reducing emissions by 26 to 28% by 2030, Victoria is opting for a 45 to 50% reduction. Not only does this introduce another variation on what should be a national energy policy but it consigns Victoria to further losses of industrial competitiveness and households to higher energy costs.

The ALP in Victoria has a history of sacrificing the state’s brown coal reserves and their low cost electricity. Initially, the power stations were used to as union playgrounds and by the late 1980s their padded workforce was tenfold the numbers necessary.  Though the ALP started to slim this back it took the Kennett reforms and privatisations to bring them into best practice.   Over the past 20 years the ALP has again imposed costs on coal and on electricity users, this time in pursuit of the green vote.

Whereas Victorians should, as they once were, be enjoying the lowest electricity prices in the world, prices are among the highest.

Discriminating against brown coal stations has also meant downgrading the more reliable power that coal brings.  Exchanging this for wind/solar means additional expenditures to manage these variable supplies and new spending on transmission lines to gather their more dispersed generation sources. All of these additional costs are paid by the Australian electricity consumer and the taxpayer.  The costs are also driving out major industrial users, with the pride of the state’s industry, the aluminium smelter at Portland, only being kept afloat by subsidies to counter the costs that other subsidies are bringing.

The amount of wind and solar in the system is even requiring the market managers to force roof-top facilities – all of which were built with subsidies – to be turned off at the increasingly frequent times when their supply threatens to bring down the whole electricity supply system.

 

This entry was posted in Uncategorized. Bookmark the permalink.

32 Responses to Victoria setting new lows in energy policy

  1. Texas Jack says:

    Angus Taylor has been as useful as a chocolate tea-pot in all of this. His “technology not ideology” mantra has only served to weaken whatever his position actually is (it’s hard to say) while seeing him flounder on things like the State delinquents like Matt Kean and his Energy Roadmap for NSW.

  2. Snoopy says:

    The amount of wind and solar in the system is even requiring the market managers to force roof-top facilities – all of which were built with subsidies – to be turned off at the increasingly frequent times when their supply threatens to bring down the whole electricity supply system.

    If only someone would give everyone with roof-top solar panels a free battery.

  3. Jannie says:

    Australia does not aspire to manufacture anything, so the leaders seem to be able to get away with extra high prices. Who cares what the impact is on a few whinging farmers and Miners, and yeah, domestic consumers.

    But how does Germany manage a manufacturing industry when its energy prices are almost twice as high as France? Compared to China, Labour Costs and Energy costs price German manufactured goods out of the ball park. No wonder they want a closed EU trading system.

    I have heard that the quality of BMW and Mercedes has been falling in recent years.

  4. Professor FredLenin says:

    No problem the economic expert pollieuppets Destroying industry with the stupid lying reewablescam ,this will create 345million groin jerbs a week for infinity , well forever . These will be governmet jerbs,paid for by borrowed money .
    Dont say were is the money coming from thats negative and racist and mizojenist the eey china has plenty of money ask the US child molestor theUS owes$28 trillion ,we only owe one trillion long way to go

  5. RobK says:

    Good work Alan.
    and new spending on transmission lines to gather their more dispersed generation sources.
    …..which have very transient flows requiring high capacity lines for random occasional utility (adding to infrastructure costs)

  6. mundi says:

    Let them keep going up.

    At 57c EVs will never be viable.

    At 67c you can disconnect from the grid and power your home from a diesel generator.

  7. Roger W says:

    The problem is the creation of the interconnectors.
    Each State should have to look after itself for power, water etc. Then the government that makes the decisions wears the consequences.
    I live on the Gold Coast and we had the local dam raised a few years ago. Over the border in Tweed Shire, they persistently resist any attempts to raise their dam walls or build new dams, but always take our water when they run low.
    If you can virtue signal with no risk, it will always end in tears before bedtime.

  8. Mango Man says:

    Businesses in NSW and Victoria have had energy costs increase by 100% over five years. Part of this was the effect on gas prices of the diversion of domgas to export, by which mechanism non-exporters like Exxon-BHP got a free ride on the “global” price imposed locally. The gas price fed into electricity costs until the weight of subsidised renewables started to crash the NEM prices for power. Now we know coal is rapidly becoming uncompetitive with renewables, but we won’t be able to get economic gas to firm it up. Now all the “leaders” in Fed and State Governments are running about trying to figure out how to avoid 1) rapid and unpredictable closures of coal plant and 2) how to make a synchronous power system designed for dispatch work with intermittent “distributed” sources of energy.

  9. Boambee John says:

    Snoopy

    If only someone would give everyone with roof-top solar panels a free battery.

    Don’t give the plicks ideas!

  10. Rafe Champion says:

    At the moment Tasmania has had zero wind power for 24 hours and SA is heading towards a wind drought so Victoria is exporting a heap of power to the wind leading state and the battery of the nation while 70% of her power is coming from coal. Take 20% of that capacity out of the system and see what happens.

    Remember the mantra, RE can displace coal but can’t replace it.

  11. Nob says:

    union playgrounds

    padded workforce

    Yes.

    I “worked” at SECV Latrobe Valley in the early 1980s.

    But my family and friends in Victoria are still repeating the left mantra that high electricity prices are caused by the privatisation.

    Still.

    And that the solution is more wind farms.

  12. Professor Fred Lenin says:

    Nob , its simple woke logic , if 5,000 subsidised windtowers wont supply enough power during a wind drought ,10,000 subsidisedwindtowers will .
    Thats gangrene philosophy,oooh ! theresa unicorn ,behind the elephant in the room .

  13. yarpos says:

    The lunacy icing on the cake is simultaneously encouraging EVs (wealthier peoples toys) and related energy demand with taxpayer dollars , while destroying the capacity and reliability of the grid with tax payer dollars. Its pure genius really

  14. Fair Shake says:

    Robbing from the poor and giving to the rich.

    Highwayman Dennis is Moore would be proud.

  15. Natural Instinct says:

    Victoria does not have to worry (in the short term) because under horizontal fiscal equalisation it will get a bigger slice of the GST pie to compensate for its low per capita economic output (this is called the Tasmanian model for green economic growth).
    But, in the long term, all this Victorian silliness is just as serious for other states that will lose funding and be propping up the “poor man” from the south.

  16. Squirrel says:

    A graph which included China, India and Russia and some of the emerging manufacturing powerhouses of Southeast Asia would presumably be even more disheartening.

    Add this to all the other cost burdens of productive economic activity in Australia, combined with our distance from large markets – exacerbated by soaring shipping costs – and it is not a pretty picture.

    All of this is also a reminder that the screams from vested interests for a return to a high rate of immigration – because of claimed widespread skills shortages – need to be looked at very closely.

  17. RobK says:

    Snoopy,
    If only someone would give everyone with roof-top solar panels a free battery.
    I understand sarcasm is intended but frighteningly many have this view that batteries too should be subsidised. Domestic batteries will do a little short term buffering of solar under ideal conditions but they will not be any kind of panacea in the overall scheme of things. Complexity increases and bills will go up.

  18. Rohan says:

    Nob says:
    May 5, 2021 at 4:04 pm

    But my family and friends in Victoria are still repeating the left mantra that high electricity prices are caused by the privatisation.

    Still.

    And that the solution is more wind farms.

    Tell them they’re right. After all, every wind-farm is privately owned.

  19. Aynsley Kellow says:

    The Victorian system was a mess. I studies the old days some years back (‘Transforming Power: The Politics of Electricity Planning’ – Cambridge University Press). It was very much a case of swallowing a spider to follow a fly, going all the way back to the Newport Power Station that was intended to break the power of the Valley unions – but inflamed relations.
    Loy Yang A was afflicted by BLF IR. Suelette Dreyfus reported in her PhD thesis (which I examined) that they wouldn’t work when it was raining, even if work could be provided inside – and they would stop work if a cat was seen on site. I kid you not.
    Part of the deal to reduce staffing levels on the Loy Yang A project was to proceed with Loy Yang B to move surplus workers to that project. Problem was, there was not sufficient demand forecast, so enter Portland and the subsidies to get Aloca to commit to that.
    Subsidies to deal with the effects of subsidies are pretty much par for the course in Victoria.

  20. Xenophon says:

    Aynsley: I believe you will find that the Alcoa at Portland (!) was done by digby crozier ahead of the loy yang commitments. Crozier overrode treasury and ignored the cost of loy yang in pricing power – not to mention the transmission across the state. Someone at Secv was telling porkies because the government had committed to keep power prices to Victorians under inflation. But they got two big increases, the first 20%.

  21. Rafe Champion says:

    The worst is yet to come.
    https://wattsupwiththat.com/2021/05/05/victoria-announces-the-end-of-affordable-home-heating-because-climate-change/

    Where is FOGS Friends of Gas Stoves when Victoria needs them?

  22. Aynsley Kellow says:

    Xenophon:

    Crozier certainly initiated the Alcoa project, but it almost fell over and was secured only after the election of the Cain ALP government. The whole caboodle needed the demand at Portland to provide demand for Loy Yang A and certainly B.

    I wrote it thus:

    ‘Loy Yang B was the project that would provide continuity of employment in the valley, which was the sweetener in the deal with the valley unions to reduce costs on Loy Yang A by reducing overmanning. The authorising legislation in 1976 had provided for the whole 8×500 MW project, and the Alcoa deal allowed this prospect to be realised by avoiding considerable over-capacity in the SECV system and was thus a vital step in the process.’

    Of course, the final two units at Loy Yang B were never constructed, and the planned Driffield station was cancelled.

  23. RobK says:

    Scaling back domestic (household) gas consumption will likely exacerbate the “duck curve”problems brought on by excessive solar .
    Pure genius.

  24. Kneel says:

    “victoria-announces-the-end-of-affordable-home-heating-because-climate-change”

    Well, with lots of renew-a-bubbles, we need more gas peakers.
    There’s much more to be made turning gas into electricity then turning electricity into heat, than there is turning gas straight into heat where it’s needed. So they will pay more for the gas – supply and demand, see?

    “If only someone would give everyone with roof-top solar panels a free battery.”
    Why subsidise house batteries, when they can subsidise EVs and use the batteries in those instead? Genius! “You already have a 50kW/h battery in your garage – we need it to keep the lights on”. Double bonus: you can’t get to work because the car went from half charge to dead overnight to keep the grid up instead of going to full charge like you intended, so you didn’t get paid and your electricity gets cut off ’cause you can’t pay the bill, meaning less demand. Triple bonus: less CO2 – unless you count those decaying corpses…

    Oh, and our friends in the insurance industry won’t pay out when your EV burns your house down, because that battery wasn’t listed on the policy and wasn’t in an approved battery shed.

    See? Everyone wins – well, everyone worth speaking about anyway. Just those dirt-under-their-fingernails losers, so who cares, right?

  25. RobK says:

    At least the US department of Energy is pushing Combined Heat and Power systems. Expensive to establish but push efficiency from 50% to better than 75%.

    The CHP Deployment Program has released seven fact sheets that explain the fundamentals and characteristics of CHP, including the following common CHP technologies: fuel cells, gas turbines, microturbines, reciprocating engines, steam turbines, and absorption chillers. The fact sheets can be found below.

    https://www.energy.gov/eere/amo/combined-heat-and-power-basics

  26. Bad Samaritan says:

    I’m currently in NSW at friends’ about 100ks from Sydney. Have just looked at their Energy Australia bill. It reads 26 cents for normal tariff and 10 cents off-peak, so I’m having trouble reconciling the claimed 39.1 cents average.

    I also know for sure the 35.6c for Qld is way out but since I do not carry my Ergon bills around, can’t verify the exact price.

    Can any Cat explain the seeming disinformation being spread here?

  27. Natural Instinct says:

    Bad Samaritan – maybe because you are looking at subsidised domestic charges. Yes governments aren’t fools – hit business and cut for voting homeowners.
    .
    Your 10 cents for off peak was probably for a “controlled load” hot water system which normally runs in the middle of the night. Off peak for time-of-use meters around 22c/kWhr. My headline business Peak rate is 37c/kWhr inc. GST

  28. Kneel says:

    “Bad Samaritan – maybe because you are looking at subsidised domestic charges.”

    The quoted numbers are the “headline” ones – in many cases, you can get up to a 40% discount for “pay on time”. Shop around – I halved my latest bill after moving to GloBird, near as makes no odds to the same usage.

  29. RJH says:

    Further to Bad Samaritan’s query, I live in the Lyne Electorate & have pursued Angus Taylor’s flawed rhetoric regarding falling “Wholesale Electrical” Prices & the correspondingly not falling Retail Prices with the local Nats member for a number of years.

    Well, blow me down with a feather, a month ago I was contacted by my Energy supplier Red Energy asking if I wished to change my current plan with a 19% tax inclusive reduction!
    from
    Step 1 (First 14.521 KWH/day) 30.305 c/KWH reduced to 24.948c/KWH,
    Sep 2 (balance) 26.40 c/KWH reduced to 24.618 c/KWH –
    CL1 from 20.90c/KWH reduced to 13.7940c/KWH
    Service Property Charge from $1.54 per day to $1.3178 per day.
    And all backdated to Jan 2021!

    Perhaps for once, my perseverance has paid off?

  30. rickw says:

    You know you’re stuffed when you’re out ‘tarding the Eurotards.

  31. Bad Samaritan says:

    NI (11.23am) been out all day and just read your….”Bad Samaritan – maybe because you are looking at subsidised domestic charges. Yes governments aren’t fools – hit business and cut for voting homeowners.” and am still not getting it….

    The bar chart above is supposed to be retail, And there’s no mention of it being for business. Retail usually means what the small user pays: what the average Cat poster pays. That 39.1 cents for NSW is about 70% above what the energy Australia bill says it is by day.

    Meanwhile a quick google for business gives the following…https://wattever.com.au/compare-the-best-business-electricity-rates/…..and I find dozens of providers in NSW at 20 cents to 24 cents per KiloWatt Hour. That was the first site I visited, so maybe there are better offers.

    It’s disappointing when Cat articles distort or outright fake the facts.

  32. Xenophon says:

    Aynsley: I think you’ll find crozier had it all contracted. Lindsay Thompson wasn’t fully briefed until too late. ALP tried to scrap it but the contract was solid rock. Kennett had another go but failed too. It’s a taxpayer and consumer sinkhole.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.