Renewables Disaster Sees Australian Power Prices Jump Another 20% – With Worse to Come

Life coaches and self-help manuals talk about dreaming the life and living the dream.

In Australia, as elsewhere, wind and solar power were touted as promising not only an end to the pesky habit of the Earth’s climate to change (a selfish obsession that our planet has been hard at for 4.5 billion years), but constantly falling power prices, that would become so cheap we would never need to open our wallets again.

However, instead of living that dream, for Australian households and businesses, life has become little short of a nightmare.

The winning combination of skyrocketing prices, load shedding and blackouts is part and parcel of attempting to run modern economies on sunshine and breezes.

One of those responsible for Australia’s power market fiasco is AGL, which built a large chunk of South Australia’s wind farms, starting back in 2009, as well as Australia’s greatest wind power disaster at Macarthur in Victoria.

A few weeks ago, AGL started publicly crowing about their plan to keep the renewables subsidy gravy train rolling, with a run of television and print media advertising, using an obsequious, too-neatly-bearded git, touring a wind farm in his tiny battery powered buzz-box.

One line in the TV ad which smacked of pure marketing ‘genius’, was when the smarmy young hipster – having announced that AGL is “getting out of coal” and is all about delivering “sustainable” wind and solar power to your door – asserts that it all comes “with no compromises to you”.

Perhaps the reference to ‘you’ excluded all Australian power consumers, because the wind and solar power champion has just announced year-on-year retail power price increases of between 16 and 19%.

Electricity customers facing big hikes despite Finkel report
The Australian
Sid Maher
10 June 2017

It will get a lot worse before it gets better for Australia’s electricity consumers, who face another round of sharp price rises in the next financial year despite the Finkel electricity review’s aspiration to ease hip-pocket pressure.

The big energy retailers are expected to show their hands on pricing in the next week, ahead of the new financial year in July, but matters are already looking grim.

AGL this week announced a 16 per cent price increase for residential customers in NSW — about $300 a year on average.

In the ACT, ActewAGL customers face rises of 18.95 per cent, translating to $333 for the “typical household’’.

South Australian customers face rises of 18 per cent, about $350 a year, under new tariffs announced by AGL, which controls about 60 per cent of that market.

“Retail electricity prices have risen because of significant increases in wholesale prices,” AGL said.

“Wholesale prices have increased for a number of reasons, including high gas prices and limited gas availability on the east coast, the closure of ageing coal-fired generators, and an uncertain policy environment.”

Queensland power prices are expected to rise only about 3.5 per cent after state-owned power companies were ordered by the Palaszczuk government to cut network costs.

Origin Energy and Energy Australia are yet to announce prices for NSW but are likely to keep prices steady in Victoria, where second-tier retailers such as Click Energy, Dodo and Q Energy are to announce rises.

The Independent Competition and Regulatory Commission said the single biggest driver of the ACT’s tariff increase had been the substantial jump in the forward prices of electricity.

Wholesale electricity prices rose by 112 per cent from $49.77 per megawatt hour to $105.69MWh in the ­May 31 year.

A big contributor to this jump was the closure of Victoria’s Hazelwood power station in Victoria, which affected the east coast and SA markets.

With prices expected to rise further, Energy Australia announced it would commit an additional $10m to financial and other support for vulnerable customers unable to pay electricity bills in NSW, Victoria, South Australia and the ACT.
The Australian

AGL’s Andrew Vesey gives his ‘no compromises
to you’ 20% price hike the thumbs up.

***

The AGL price hikes of 16% (NSW), 18% (SA) and 19% (ACT) represent annual price increases of between 10 and 12 times the 2016/17 annual rate of inflation of 1.5%. That punishment follows 12% increases in retail power prices in SA last year: South Australians Locked in Wind Power Price Disaster: Retail Prices Jump Another 12% – and a 90% increase in power costs for businesses: Wind Power Costs Crushing South Australian Businesses: Firms Hit with 90% Price Hike

As the Federal government’s Large-Scale RET increases from its annual target this year of 26,000 GWh to its ultimate target of 33,000 GWh in 2020, the cost of the subsidies directed to wind and large-scale solar will reach $3 billion a year, every year until 2031 and, between now and then, add $42 billion to already crippling retail power bills: It’s Time for Frydenberg & Turnbull to Come Clean on the Cost of Subsidised Wind Power

Then there is the small issue of having power available at all.

Finkel sounds alarm on power; states in danger of blackouts
The Australian
David Uren
10 June 2017

Victoria and South Australia are at risk of damaging blackouts this summer because of the closure of the Hazelwood brown-coal power station.

The Finkel report warns that if power companies do not respond to high prices by installing fresh capacity, the reliability of the networ­k could be compromised over the longer term.

The Australian Energy Market Operator is taking steps to shore up supplies, banning any scheduled summer maintenance of generator­s and requiring any “mothballed” plants to be made available from October.

But the Finkel report says the key problem is the lack of any new generating capacity that is capable of being dispatched rapidly, such as gas, hydro or coal.

“The past few years has seen the retirement of significant coal-fired capacity from the National Electricity Market while there has been no corresponding reinvestment in new dispatchable capac­ity,” it says.

The renewable energy target has provided an incentive for wind power, but it is not available on-call. “If new dispatchable capacity is not brought forward soon, the reliability of the National Electric­ity Market will be compromised,” it says.

The report rejects the approach taken in Britain and the northeast of the US where the government holds an auction for companies to supply new capacity, saying it is too radical a step and should only be considered if there is an “irresolvable failure” of the existing electricity market to encourage new generating capacity.

However, it recommends the creation of a new energy security board that would have responsib­ility for ensuring the reliability of the system.

There would be new obligations on transmission companies and electricity generators to operate with spare capacity and the ability to supply rapid increases at times of shortage.

It says a possible strategy would be for the AEMO to retain a strat­egic reserve of electricity capacity, which would be held outside the market but could be drawn on in times of emergency when reli­a­bility standards are breached.

The Finkel review also calls for better planning for the closure of coal-fired generators. It rejected a call for a mandatory 50-year maximum lifespan to be imposed on coal-fired generators, but noted that the existing fleet was getting old. By 2035, 68 per cent of the coal-fired generators now in operation will be older than 50.

The report said the Northern and Playford generators in South Australia were closed with only 11 months’ notice, while Hazelwood in Victoria provided only five months’ notice. The report says all large generators should be required­ to give a minimum of three years’ notice of closure, to allow for better planning.

Gas is expected to play a greater role in electricity supply.

The Turnbull government is legislating to gain the power to implemen­t export controls on gas when there is a shortfall in the domestic market.
The Australian

As we suggested in a previous post, Finkel’s suggestion that coal-fired generation plant – rendered unprofitable by heavily subsidised wind and solar power – should keep running for years while bleeding cash is as ridiculous as suggesting that adding more wind and solar power will lead to lower power prices.

But, at least, Finkel has recognised that keeping the lights on is about keeping coal-fired plant in the game. Irrespective of their age, Australia’s coal-fired plant deliver reliable and affordable power, whatever the time of day and whatever the weather. What’s left of Australian business is banking on it – for pretty obvious reasons:

About stopthesethings

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

Comments

  1. Victor Hill says:

    The use of power stations and kilometres of electrical lines is old thinking. Each suburb or town could have its own storage battery plant with solar panels on its roofs. The supply of electricity would be local, not requiring the terrible wastage of the electrical resistance of the wires let alone the materials wasted in its construction, including towers. Never again would we be subject to some big power company controlling our lives and our power bills. We would be our own masters and have independent power to boot. This diversification of the infrastructure would give us advantages both against exploitative power suppliers and military attack upon the electrical grid. We would be less vulnerable to outside oppressors in both cases. In one breath power suppliers say we will have to build more power stations to cope with the increasing population and the next breath they proclaim that they are being threatened by more households producing their own electricity. They need us, we don’t need them. Modern batteries that will power the electric cars of the future can also power our homes. The opportunity is now for a serious rethink of our position.

    • Happy with your model, Victor. Provided you pay for the full cost of going off grid all by yourself and don’t come back looking to get power from the existing grid when the sun stops shining. No one who owns solar panels wants to pay the full cost of buying them; they all want to get paid ridiculous sums for the excess they put back into the grid; and all want a reliable supply available as insurance when their ‘system’ fails (an insurance policy paid for by everyone else).

      If you want mega batteries and solar panels, no one is preventing you, but stop pretending that you are paying the full cost for that choice: we all are. In the real world power is needed to supply water to your home, draw sewage away from it, to power traffic safety systems and every business that supplies goods and services to you.

      If you want to destroy mining, manufacturing and mineral processing; to deprive power to the poorest and most vulnerable who cannot afford power now and who will never afford the panels and batteries you crave – they are lucky to afford the rent – that’s matter for you. STT thinks that jobs and the poor matter and will keep advocating for both. And once you’re plan is up and running we’d love to hear how your Utopia is fairing.

    • David Walker says:

      Clearly you are unaware of the economies of scale.

      As to modern batteries to power electric cars, we’ve been waiting for an increase in efficiency of an order of magnitude since the start of the twentieth century.

      Then there’s charging, I can put enough fuel in my Mercedes to cover over 500 miles in a couple of minutes. There is no possibility of batteries getting remotely close to that, ever.

      To cap it all, in my half a century plus of motoring, I have numerous times been very thankful for the spare gallon of fuel in my boot. Give me a shout when I can get the equivalent of a spare gallon of electrons.

      • David your “spare gallon” could be arranged for your plug-in electric car but at a cost. If you want that “spare gallon” on your off-the-beaten track journey then you’ll most likely need to tow a sizeable, trailer mounted, Diesel generator behind your Tesla S or Nissan Leaf. That is assuming of course that these vehicles are capable of towing.
        Failing that, if you’re lucky enough to find a friendly local who will allow you access to a spare power point in his/her back shed, you can look forward to cooling your heels for 24 hours or so while your your 60-70 kWh battery trickles its way to somewhere near full charge. Even in places like Sydney or Melbourne you’ll be waiting a minimum of half to three quarters of an hour at one of the so-called super charging stations while your battery is “fast charged” to around 80% of capacity and that’s assuming you don’t have to wait in line for your turn at the charger.

  2. Crispin Trist says:

    Good call for Josh Frydenberg to say NO to Lord Howe wind turbines. Excellent move.

    Around 90% of the islanders may be cursing him, but it is the right decision. The bird life is too precious as is the landscape. This is what the tourists come to see after all.

    Wind is not the only renewable energy source available to a small community. Solar should work well and there are some interesting small water turbines that I am reading about in the UK that can use the running water from a stream to supply power. They would appear to be achieving some staggering results of around 80% of installed capacity.

    The River Derwent in the UK helped power the textile mills of the industrial revolution. It is still being used today for hydro-electricity to drive small turbines instead of mill wheels.

    Who said renewable energy was a new thing?

  3. “It says a possible strategy would be for the AEMO to retain a strat­egic reserve of electricity capacity, which would be held outside the market but could be drawn on in times of emergency when reliability standards are breached.”
    Maybe this strategic reserve could be held in China where they are able to sell electricity for 8 Cents per Kilowatt hour. This makes as much sense as keeping a “strategic reserve” on the Australian mainland unless it’s mobile diesel generators mounted on semitrailers. Just shows the stupidity and lack of understanding these fools have of electricity generation and transmission.

  4. So coal generators will be compelled to forgo scheduled summer plant maintenance which for many decades has been conducted during summer because industrial power needs are lower during this period because many factories shut down for the holiday period. One wonders whether new AEMO boss Audrey Zibelman will ensure that AEMO underwrites the cost of damage to boiler and turbo-generator plant stemming from enforced lack of vital plant maintenance?

    No I don’t think so either.

    Probably in the same “Oh, we didn’t think of that!” category as that other Finkel master-stroke of preventing coal generators from going out of business without giving three years notice even though it is this very misguided planning and legislation that will rob them of the market for their product, meaning that to continue to operate places them at risk of trading while insolvent.

    Again maybe the Turnbull/Frydenberg/Finkel junta will have their losses reimbursed and their offences against the Corporations Act quashed. No I don’t think so either.

    Stay tuned for more, this flight of Leftist fantasy just gets more outrageous by the day.

  5. Son of a Goat says:

    Have a read of this!
    http://www.smh.com.au/business/energy/shareholders-reject-agl-boss-megamillion-pay-cheque-20160928-grqi4w.html
    Very noble of Desert head to train his phone operators to look for signs of domestic violence. It seems those who get behind with their power payments are more likely to be victims of domestic violence.
    This whole thing is becoming rather sadistic!
    This is PR bullshit in the extreme.

    By the way AGL how much did you pay for your new logo it looks like the head of a chook!

  6. Melissa says:

    Post-Summer will be interesting after maintenance on turbines is ceased to supposedly assist meeting demand.

    Doesn’t make sense to increase added expense from the risk of component breakdowns.

    The AEMO must surely realise when turbines break down ie gearbox or blade they are out of action for months, sometimes years. Wind farms have 3, 6 and 12 mths maintenance schedules and if not kept up, productivity of the turbines drops. Productivity of a turbine is of no interest or concern to me, but gunk builds up on blades, inside components have to be kept clean and well oiled else breakdowns, possibly accidents and noise and vibrational impacts increase.

    In the long run poor maintenance can’t be good for such expensive equipment that we pay for through our electricity and gas bills. Turbines rust out on coastal sites and require maintenance. It’s not a pretty sight for tourists seeing mile after mile of oil stained rusting turbines. Oil leaks should be prevented from entering soil and contaminating water supplies by correct maintenance and proper Permit conditions.

    The Geelong Council wants to spend $85000 to reduce greenhouse gas emissions with carbon offsets. So they’ll plant trees, buy shares in renewable energy projects and purchase ‘green power’, wind and solar. We’ll also get slugged again with rate rises to cover the additional solar projects the council intends to implement. These policies perpetuate the cycle, making in- affordable electricity and fail to heed the warnings and negatives of increasing dependence on unreliable renewables systems.

    Running turbines faster when the wind blows, using longer blades and taller towers won’t resolve the issues making wind and solar useless at meeting demand and utterly useless at protecting nearby neighbours from likely harm.

    • Melissa says:

      Also what’s the future plan when turbines, panels and batteries age?

      • We will build large numbers of coal fired reliable power stations producing cheap electricity to power the industrial complexes that do the work building the failed windmills and their generators now. It will all work out, thousand’s of jobs and huge investment’s of taxpayer money in building the power stations. Economics means nothing to the climate change believers, money grows on trees and windmills.

  7. Peter Pronczak says:

    How can anyone be called a ‘scientist’ let alone a ‘Chief one’ when nuclear power isn’t considered in affordable electricity reliability.
    Even Bob Hawke has suggested a rethink on processing nuclear waste.
    Apparently while pollies use the words ‘Honourable Member’ before slagging off at each other, they don’t get enough time to understand the rest of the hypocrisy going on; like Germany buying French nuclear energy produced electricity, BP Solar doing a runner from Germany after their solar plant caught fire a la James Hardie Industries asbestos escape, or even to keep up with the current state of nuclear development; more than likely mentioning the word tokamak would most likely produce a ‘huh’ from Finkel as it does from the pollies – must have been excluded in the reference scope just like Royal Commissions & the rest.
    Perhaps time to take the financial system to the cleaners instead of it taking average Australians to the poor house.
    Jeremy Corbyn has made the UK Labour Party the largest membership party in Europe by introducing mainly young people to the following: Bring in a National Credit bank as CBA was, add Glass-Steagall banking separation, re-nationalise life necessities, then get on with building long needed infrastructure.
    It’s not rocket science – not that we’ve got any of that either.

  8. Reblogged this on Climatism and commented:
    “In the ACT, ActewAGL customers face rises of 18.95 per cent, translating to $333 for the “typical household’’.

    South Australian customers face rises of 18 per cent, about $350 a year, under new tariffs announced by AGL, which controls about 60 per cent of that market…”

    ‘The proof is in the pudding’ as AGL et al gleefully chuckle to themselves.

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