South Australia’s Wind Power Debacle Destroying Jobs: Unemployment Rockets (Again)

Premier plays economics dunce.

***

The principles of economics are not hard, nor are they a mystery.

Jobs require viable businesses, viable businesses require cheap and reliable electricity. Deprive businesses of cheap and reliable power and those businesses will very soon cease to exist.

Those truisms, however, continue to fall on deaf ears in Australia’s so-called ‘wind power capital’, South Australia. Its obsession with wind power has relegated it to the status of not just a national, but to an international laughing stock.

The reasons for that have been spelt out on these pages time and time again, such as in this post: South Australia’s Disastrous Wind Power Experiment: Business Crippled as Power Prices Double

No amount of political varnish or PR polish can avoid the conclusion that SA’s skyrocketing power prices and erratic supply are all due to heavily subsidised wind and solar power – which have not only destroyed its once reliable grid, but are destroying jobs and businesses, in a State where meaningful employment is a rare and treasured thing.

Here’s a run of articles detailing the depth of despair among SA’s business leaders, which given the ignorance of SA’s political and media class can only sink further.

Grid lock – our power failure
The Advertiser
Sheradyn Holderhead
17 May 2017

THE nation’s energy supply is less reliable because coal and gas power stations are being pulled from the grid – and the impact has been worst in South Australia, a report reveals.

The Australian Energy Market Commission’s annual report into the reliability of the grid found the “trend” to replace traditional power stations with wind and solar must be “viewed with caution”.

State Energy Minister Tom Koutsantonis said the report was another reminder the national market was broken but Opposition Leader Steven Marshall blamed the State Government’s unplanned rush to renewable energy sources.

It comes as SA Power Networks had its 2017-18 pricing proposals approved, which would increase the typical annual household bill by $18.

The report showed the state’s power prices were the most volatile because half of the 108 “price events” that occurred nationally in 2015-16, were in SA.

Forecasts on energy demand were the least reliable for SA, which has the potential to create a shortfall in supply – which happened in February.

“While the withdrawal of synchronous coal-fired and gas plants is being partially offset by the entry of more intermittent wind and solar generation, this trend needs to be viewed with caution,” the report found.

“Looking ahead, a supply shortfall is forecast for Victoria, SA and NSW in the short to medium term if sufficient additional investment does not come from the market.” The report said there was a “significant withdrawal” of traditional large-spinning power generators in SA. These rotate at the same speed as the frequency of the system, which lessens the impact of a sudden disturbance such as the loss of another generator or power lines being knocked over.

It found not only did this risk creating more frequency disturbances, which could cause localised blackouts, but emergency control schemes may not be able to prevent a broader system disruption – widespread blackouts.

SA also had more “lack of reserve” notices – which AEMO issues when it fears there could be a supply shortage – than any other region for eight of the past 10 years.

The report noted that in the next 10 years, rooftop solar panels could cater for the minimum power demand in SA.

Mr Koutsantonis said a lack of federal policy on carbon pricing had resulted in the disorderly exit of coal power. Mr Marshall said the report was further proof SA has the nation’s most expensive and least reliable electricity system. “The Weatherill Labor Government was warned not to rush towards intermittent generation at the expense of cheap, reliable base load power but they did it anyway,” he said.
The Advertiser

Companies win regulatory approval to bulk buy electricity
The Australian
Michael Owen
18 May 2017

Several big electricity users in South Australia have won final regulatory approval to buy power in bulk to avoid high prices and uncertaint­y they say is threatening the viability of many businesses.

The Australian Competition & Consumer Commission yesterday approved the plan, led by the South Australian Chamber of Mines and Energy, paving the way for the group of 27 companies to bulk-buy power for the next 11 years.

The group includes Oz Minerals, Arrium, Nyrstar, Thomas Foods, universities, supermarkets and winemakers, representing about 16 per cent of the state’s electricity consumption.

The application to the ACCC was made in January, at the height of a power crisis driven by the closure of South Australia’s last coal-fired power station and the state’s more than 40 per cent renewable energy mix, which has led to skyrocketing prices and unreliable supply. The ACCC agreed to their plan in a draft ruling last month.

ACCC chairman Rod Sims said the group accounted for a total load of about 269 megawatts of electricity. “This joint tender has the potential to change wholesale market dynamics by allowing generators to use existing plants more efficiently, or encouraging new entrants into South Australian electricity generation,” Mr Sims said.

“This could bring the benefits of increased competition in the wholesale market for electricity.”

Earlier this week the chamber called for expressions of interest from electricity suppliers, which will close in a fortnight.

SACOME chief executive Rebecc­a Knol said South Australia had the most volatile and expensive wholesale electricity prices in Australia.

Companies were getting indiv­idual contract prices “at a prem­ium” and between 30 per cent and 80 per cent higher than previous rates. “By aggregating their load, they will improve their individual bargaining position and be able to establish more cost-competitive supply contracts,” she said.

South Australian Liberal opposition energy spokesman Dan van Holst Pellekaan yesterday welcomed the ACCC’s decision, “which will hopefully assist in driving down electricity costs for these important businesses”.

The SA government released a $550 million “self-sufficient” energ­y plan in March that includ­ed a new $360m gas-fired power plant and $150m renewable technology fund for battery storage.
The Australian

Arrium steelworks turns its back on sunshine and breezes.

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Michael Owen’s story is a little vague on the details. However, STT is prepared to wager that the businesses concerned will not be purchasing power from sources that rely on sunshine and breezes. SA’s biggest employer, BHP Billiton knows just how expensive playing that game can be, having been forced to pay nearly $2.6 million in a single day for power that would ordinarily cost $250,000, when the wind stopped blowing in July last year (see our post here) – a scenario that plays out every other day (see above SA’s wind power output for the first fortnight of May).

No, STT is pretty confident that the firms involved in the plan will be locking into power coming from either Victoria’s coal-fired plant (via the Victorian  interconnectors) or from AGL’s Torrens Island gas-steam plant or perhaps Engie’s Pelican Point Combined Cycle Gas plant, simply because none of the sources in that list depend upon the time of day or the weather.

However, at the risk of sounding more than just a little pessimistic, the mooted private power purchase plan is probably all too late for South Australia.

Power price surge is killing jobs, says Business SA
The Australian
Meredith Booth
20 May 2017

South Australia’s high electricity prices have contributed to its soaring unemployment rate, the highest in the nation, says the state’s peak industry group, Business SA.

Power prices and blackouts were affecting business insurance expenses, investment decisions and “unfortunately having an impact on employment as well”, Business SA executive Anthony Penney told a parliamentary inquiry yesterday. He said industry lost $450 million in the wake of a statewide blackout in September when a storm downed transmission lines that caused a trip in wind farm power generation and overloaded the Victorian interconnector.

The Weatherill government’s energy plan, to counter the loss of thermal baseload power in the state, had not put downward pressure on power prices, Mr Penney told the statewide blackout parliamentary committee. “If you look at today’s future energy prices, we’re still almost 30 per cent higher than the eastern states,’’ he said. “Businesses constantly tell us it’s affordability that’s the No 1 issue followed by reliability. Businesses are looking to how to better manage their staffing levels due to overall costs.”

The state’s worst job figures in more than a year showed unemployment climbing to 7.3 per cent in April, while all other states fell.
The Australian

Tom Koutsantonis deaf to all that matters.

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. Crispin Trist says:

    British Steel, Scunthorpe are optimistic about a return to profit due in part to a £2 million contract signed to supply steel for the construction of the Hinkley Point C Nuclear Power Station.

    Other projects include, and may I suggest that PM Turnball takes note of this, the new high speed rail project HS2, and the expansion of Heathrow Airport.

    https://www.theguardian.com/business/2017/jan/25/british-steel-greybull-capital-to-reverse-salary-cut-for-workers-agreed-under-tata

  2. Son of a Goat says:

    Looks like I picked the wrong month to give up alcohol.

    Welcome to rural South Australia and in particular Yorke Peninsula a broad acre cropping region dotted with small country towns of up to 1000 citizens. It is also the region where Senvion tried unsuccessfully to put up a 600MW wind farm known as the Ceres Project.

    In one small town the butcher shop is up for sale, apparently the cost of running the cool room have increased so much that it’s becoming harder to make a profit.

    The Local IGA can’t expand or offer a larger range of goods as the price of power cripples their business.

    Alas those who have put up solar panels in a bid to reduce the power consumption of their business now find that any savings due to the decrease in power accessed from the grid is becoming insignificant because the proportion of power they do obtain from the grid has risen so dramatically.

    Young Tommy Kouts proudly retweeted the decision of the ACCC to allow South Australia’s largest businesses to bulk buy their power. Who is left then for the power retailers to screw over?

    The mums and dads of your average family, said to be the cornerstone of Labor’s policies.

    To top the month off, the AEMO and Arena have got together in response to the crisis and the suspected upcoming shortages due next summer to create a policy where in times of large power use they pay businesses to reduce their power usage.

    They have called their policy “Demand response.”

    So when it’s forty degrees in the shade boys and girls, take one for the environment and turn off your air conditioner.

    Why those geniuses’ at the SA Labor party and the Clean Energy Council will salute you.
    .

    • Jackie Rovensky says:

      Oops I have been thinking the Labor Party and the CEC are one in the same organization I must have missed that they were separate identities.
      So does that now mean there is a conglomerate of the Unions, CEC, Greens, AEMO, the Wind Industry and of course the ABC.
      Now that would explain a lot.

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