State of Emergency: South Australia’s Wind Power Crisis Hits Full-Scale Panic

It’s a little like watching the same train wreck, over and over again. South Australia’s power pricing and supply calamity is something that STT has been predicting for years.

Now that the disaster has been realised, mainstream media are all over it like a tropical rash.

In South Australia there is a pervasive sense of helplessness, blended with barely concealed rage at the morally bankrupt idiots the pretend to govern the economically battered State.

That a full-scale revolution has yet to occur in South Australia is probably down the observation made by the late, great STT Champion, Alby Schultz, that:

“The only reason people are not rioting in the streets about the unjustified increase in their power bills is that they simply have no idea what is going on.”

That prescient little vignette was delivered by Alby in the Federal Parliament in February 2013, when he was the Liberal member for Hume.

However, with power prices doubling (again), and routine load shedding and blackouts part and parcel daily life in South Australia, it can’t be very much longer before South Australians grab their pitchforks and hit the streets.

Here’s a riot promoting trifecta from The Australian.

Long hard battle to keep lights on in summer
The Australian
Meredith Booth
8 December 2016

Low reserves of electricity supply and the potential for blackouts will dog southeast Australia for the next three summers, the Australian Electricity Market Operator has warned as power plants close and big energy users scramble to protect themselves from volatile prices.

Energy Users Association of Australia chief executive Andrew Richards said large companies could risk the “extreme sport” of buying electricity on the spot market to offset price increases, while the Australian Hotels Association said some businesses were facing power bill increases of more than $500,000 as they struggled with rising costs.

In a December 6 notice to the energy market, the AEMO warned of “low reserve conditions” in spare generation capacity available to South Australia for the next three summers and to Victoria next summer, which users said would lead to higher spot prices.

The warning has come as South Australia struggles without Port Augusta’s 520 megawatt coal-fired baseload plant, closed by Alinta in May, and ahead of the closure next March of Victoria’s 50-year-old Hazelwood plant in Latrobe Valley, which will ­remove 5 per cent of baseload power from the national market.

The update on AEMO’s three-year outlook shows low surplus power supply once peak loads are met, outages had been taken into account and other requirements are satisfied.

An AEMO spokesman said load shedding or blackouts could occur if peak demand spikes higher than forecast, driven by extremely hot days, and the market would likely respond by firing up mothballed plants, lifting gas-fired and coal-fired generation in South Australia and NSW and seeing big energy customers close operations when prices were high.

Mr Richards, who represents South Australian association members Woolworths, packager and glass manufacturer Orora and Port Pirie lead smelter owner Nyrstar, said that would translate to higher prices and possible blackouts.

“It also means if you intend buying on spot this summer, it will be an extreme sport,’’ Mr Richards said.

“Do you play the extreme sport of the spot market game or do you get contract cover? That’s the commercial decision people face. It’s certainly made it far more perilous to be a large energy user than in the past.”

Smaller users, including hoteliers and supermarket owners, were working with the South Australian government to harness buying power for a better deal with retailers.

Australian Hotels Association South Australian president Peter Hurley said power had become “a debilitating burden on business, an investment barrier and a jobs killer. It is surely one of the major challenges for the state.”

“Power prices continue to rise with absolutely no connection to our low inflation rate,’’ he told a group of politicians, industry chiefs and civic leaders in Adelaide this week.

“One country pub has notified the AHA that their peak rate has increased by 417 per cent. One company has advised the office they employ 600 South Australians and the increase of their power bill on their new contract that they’ve just had to sign is in excess of $550,000 a year.

“Yet most of the politicians think hotels can simply pass on the cost to consumers.”

Representing 600 pubs throughout the state that contribute more than $4 billion to the economy and employ 26,250 people, the AHA would work with South Australian Treasurer Tom Koutsantonis on a collective buying contract to encourage ramping up baseload gas-fired generation.

Supermarket group Foodland, with 118 stores dependent on refrigeration, is believed to be in urgent talks with the government.

Mr Koutsantonis said he was encouraging discussions between participants across the energy supply system to provide more competitive gas and electricity prices for all customers.
The Australian

***

Quixotic Jay Weatherill is again tilting at power windmills
The Australian
Judith Sloan
9 December 2016

There is no doubt Jay Weatherill is feeling desperate these days. Not only do households and businesses in his state face the highest electricity prices in the country, the outlook is bleak.

The Australian Energy Market Operator says average electricity prices in South Australia next year will be 1.7 times higher than in NSW and 2.4 times higher than in Victoria. So what sane business person would consider investing in South Australia?

In an act of pure political vanity, the government there allowed the last coal-fired baseload power station in the state to close. The owner of the Northern power station offered the government a deal that involved considerable investment and a commitment to hang around for many years. The offer was rejected on the basis other power operators would demand the same deal.

Now the state government is running an auction to select an electricity operator to set up in the state using the lure of desirable take-or-pay terms with a guaranteed return.

The Premier is now also taken by the idea of an emissions-intensity scheme that may work in theory but has never worked in practice. And if the federal government won’t bring it in, he thinks the states should go it alone.

Here’s the ironic bit: he is implicitly admitting that the renewable energy target is a complete dud. It has led to overinvestment in unreliable renewable energy; it has driven up electricity prices by sending low-cost baseload electricity generators broke; and it has created instability and unreliability in the grid.

Does Weatherill want to get rid of the RET, which would require federal legislation, or is it his intention that the RET continues (which runs to 2030) alongside his new you-beaut emissions-intensity scheme? The mind boggles about the complications of these two schemes running in parallel.

All the progressive press is jumping on the emissions-intensity scheme bandwagon: don’t you know the CSIRO supports this scheme? As if this is persuasive.

The journalists might care to consult the impenetrable, technocratic report by the Climate Change Authority on the topic. Here is the key paragraph: “The ability of emissions-trading schemes [including emissions-intensity schemes] and carbon taxes to drive substantial changes in long-term investment decisions towards lower emissions alternatives has yet to be demonstrated in practice.

“For this to happen, investors must have the confidence to allocate billions of dollars to projects that would be uneconomic if the policy were repealed or watered down in the future. Policy stability and credibility is crucial. To date, ETSs and carbon taxes do not appear to have influenced long-term investment decisions in a large-scale way.”

Does Weatherill really think an EIS cobbled together between a few states or to apply in South Australia alone, would attract any confidence, let alone interest, among investors?

Next idea, Jay?
The Australian

***

Study green energy costs ‘or face a mess like Europe’
The Australian
Dennis Shanahan
9 December 2016

The “mess” of electricity systems in Europe with dramatically raised power prices and uncertain supply will occur in Australia unless plans to go it alone on carbon pricing or extend renewable energy targets face “rigorous cost-benefit analysis”, a new study has found.

According to Robert Bryce, a senior fellow of the conservative US Manhattan Institute think tank and expert on European energy, European experience of emissions trading schemes and renewable energy targets to cut carbon emissions “provides some readily discernible lessons”.

Mr Bryce said the European lessons are that large-scale integration of renewable power does not provide savings but is a net cost to consumers and industry as well as unbalancing electricity markets and destroying investment values.

As Malcolm Turnbull rejects any prospect of an emissions trading scheme or impost on power generators under an emissions intensity scheme and South Australian Premier Jay Weatherill threatens to “go it alone”, Mr Bryce, who is visiting Australia, says there is “an object lesson for Australian policy makers” in the European experience since 2005.

At the COAG meeting today in Canberra crucial reports on electricity costs, the reliability of renewables and the electricity market will be discussed against a backdrop of political differences over power prices and reducing carbon emissions. Yesterday the Prime Minister said states had already pursued their own agendas on energy policy “to the cost of their businesses and the cost of households” and South Australia was a good example.

“What South Australia is doing is putting at risk the jobs of South Australians, the prospects of South Australian business. Jay Weatherill’s approach to energy has been condemned by the business community in South Australia, they’re appalled,” Mr Turnbull told 3AW radio.

Bill Shorten said Australia needed a national approach and claimed Mr Turnbull had become a “complete coward on climate change”.

“Malcolm Turnbull is demonstrating that he is under pressure, that he is lashing out, and that now he is making terrible decisions about the future of climate change,” the Opposition Leader said.

In a paper to be released next week, Mr Bryce said: “While emissions-reduction policies are politically fashionable, the obvious result of the EU’s policies has been … growing backlash at the soaring cost of the renewable-heavy mandates. The backlash is also coming from rural landowners who are inflamed by the encroachment of large wind-energy projects on their neighbourhoods. This backlash has forced European policy makers to begin scaling back their plans.”

In a report for the Manhattan Institute, Mr Bryce said the German energy transition now faced problems of higher costs, continuing reliance on fossil fuels and “pushback” from consumers and landowners.

“Europe’s entire electricity sector is, to be polite, in a mess. Costs for industrial and residential customers have soared,” he said.

Mr Bryce said blackout-hit South Australia is the only Australian state to have adopted the EU road map of reducing greenhouse gas emissions by 80 per cent by 2050.
The Australian