Australia’s Renewables ‘Transition’ Leaves 42,000 Families in Abject Energy Poverty

Australians have just worked out that the renewable energy obsession which has gripped our political betters is delivering power price increases, with no end in sight, and a grid on the very brink of collapse. While eco-zealots keep telling us that this is just a ‘bump in the road’, and that power consumers need to learn the take crunchy with the smooth, most power punters have worked out that this is serious, mum.

Wind and sun worshippers can’t ignore their pinup girl, South Australia and the fact that it – like its equally obsessed doppelgänger, Germany and deranged cousin, Denmark – suffers the highest retail power prices in the world.

As we explained in this post – Guilty: Subsidised Wind & Solar Drive Australia’s Rocketing Retail Power Prices – it doesn’t take Sherlock Holmes to identify the culprits.

And the result for tens of thousands of Australian households is nothing short of criminal.

‘Energy poverty’ hits 42,000 families
The Australian
Sid Maher
11 December 2017

Large low-income families, pensioners and indigenous Australians have been hardest hit by the rise in energy costs and face increasing difficulty paying electricity and gas bills that could consume 12 per cent of their household budgets.

Research to be released today by KPMG, using census data and the Household Expenditure Survey published this year, pinpoints the impacts of “energy poverty’’, suggesting about 42,000 families are struggling to deal with rising power costs.

The paper, authored by demographer Bernard Salt, who acted as special adviser on the research, and Cassandra Hogan, KPMG’s national sector leader for power and utilities, suggests that spending on energy rises only modestly as income rises.

Per-person spending in the lowest income bracket averaged $15.57 a week compared with $18.91 in the highest income bracket. This meant low-income families had limited ways of reducing energy costs and large families and pensioners were most vulnerable to rising bills.

A low-income family of five with an estimated weekly energy cost of $77.85 would be spending about 12 per cent of their weekly income of about $650 on energy. A pensioner couple’s weekly energy costs of about $31 would be 5 per cent of a weekly income of $650.

Ms Hogan said the rising cost of energy could affect a household’s quality of life “in a very real way since energy is a fixed, as opposed to a discretionary, cost’’. “And the reason why it is devastating is because it exposes no less than 1 per cent of the Australian nation, including no less than 200,000 kids, to the bruising effects of energy poverty,” Ms Hogan said. “Poor households with big families in the public housing estates of our biggest cities are most exposed. For these Australians there is no defence.’’

The impact of energy poverty includes about 10,000 low-income families in the western Sydney suburbs of Fairfield and Liverpool. Energy poverty hot spots in Melbourne include about 9700 families in the city’s north at Hume and the southeast at Dandenong. In Brisbane, the impact is clustered around Logan to the south of the city, affecting 3700 families. In Perth about 3000 families, centred on Gosnells, are affected. And in Adelaide, the impact is on about 2400 families around Salisbury.

The research found that weekly average household spending on domestic energy had risen 26 per cent over six years to $40.92 from $32.52 in 2010.

Ms Hogan said better targeting of relief payments and hardship schemes was required from government and retailers. She said customers facing hardship could be automatically placed on the best available energy offers. She also called for improved efforts to offer early assistance to customers struggling to pay.

“The federal and state governments need to develop a national concessions framework to ensure a consistent and transparent approach to customer assistance that minimises costs for retailers and hence consumers,’’ she said.

Smarter technology enabling customers to understand where costs were escalating quickest would help them manage. They would also benefit if retail plans were made easier to understand and to compare like-for- like.

While new technology such as gas and battery storage and more energy-efficient appliances could help, gas remained a potential problem. There were insufficient options to alleviate gas consumption, which represented a large proportion of household energy usage.
The Australian

In the face of that utterly unnecessary suffering, it takes a special kind of character to assert that all Australian need do is double down, squandering $billions on more windmills and panels, squandering even more on mythical mega-batteries and kneeling prostrate before the wind gods, praying for more favourable breezes.

With the likes of Audrey Zibelman and Innes Willox calling the shots, Australia’s poor and vulnerable can expect much worse, from here.

NSW, Victoria brace for power price shock
The Australian
Matt Chambers
12 December 2017

NSW and Victorian wholesale power prices are set to rise as much as 50 per cent in coming years, boosting profits at energy giants AGL and Origin, as peaking power that requires high prices to start is increasingly required to back up renewables.

This is the view of analysts at investment bank Goldman Sachs, who say a recent softening in electricity futures prices is underestimating a coming price shock by 20-30 per cent, even if the National Energy Guarantee is put in place. “We forecast wholesale electricity prices will rebound towards a new peak of between $120 and $130 per megawatt hour,” Goldman Sachs analyst Baden Moore said in a note to clients.

“The rise in prices is linked to rising demand for firm capacity offsetting the downward pressure from cheaper new renewables.”

In South Australia, prices are forecast to average $150, while in Queensland, which has state-owned coal generators, prices are forecast to fall to about $50.

The report, which last week led Goldman to upgrade profit forecasts for AGL and Origin, comes as AGL over the weekend revealed its plan to replace the Liddell coal-fired power station in NSW with renewables and a “firm capacity” mix of gas peaking plants and batteries for when sun and wind conditions are not conducive to power production.

AGL said the new plan, to replace Liddell by 2022, would have a cost of $83 per MWh, which is around current prices.

But Goldman says the power prices that consumers will face will not be dictated by the cost of power. They will be driven by market conditions that require high prices — sometimes spiking to the maximum $14,000 per MWh — to activate the increasingly frequently needed gas peaking power.

Mr Moore says this forecast differs to the approach taken by the Energy Security Board and National Energy Guarantee, which is basing forecasts that costs will come down on the cost of new supply. The ESB has estimated the NEG could lead to a $100 reduction in annual power bills from 2020 to 2030, with more investment in electricity supply putting downward pressure on prices.

Goldman did not offer a solution; it just upgraded AGL and Origin to buy, raising 2020 profit forecasts by 18 per cent and 11 per cent respectively because of the coming power price jump.

“The key beneficiaries of the market conditions are likely to be those with portfolios large enough to have influence on the price structure in the market,” Mr Moore said. “AGL and Origin are well-positioned on this basis.”

The bank boosted its AGL valuation by 21 per cent to $31.10 a share and its Origin valuation by 36 per cent to $10.70.

In 2016-17, wholesale power prices averaged $88 per MWh in NSW, $70 in Victoria, $123 in South Australia and $103 in Queensland.

Since the closure of Hazelwood, average prices over this financial year so far have jumped to $95 in NSW and $103 in Victoria but fallen to $82 in Queensland and $102 in South Australia.

AGL’s plan to replace Liddell with up to $1.36 billion of largely non-coal power and storage has come with concerns about rising power prices. Yesterday, the Minerals Council of Australia backed calls by Manufacturing Australia for a focus on cost as well as reliability, noting 40 per cent of Australia’s low-cost baseload plant in 2012 was likely to be retired by 2030.

“Policy settings need to ­ensure that ageing baseload ­generation is replaced with low-cost, reliable energy,” council interim chief David Byers said. “As a country, we should be focusing on how to reduce energy costs, not limiting increases.”

Australian Industry Group chief Innes Willox said AGL’s ­assessment that replacing Liddell would be cheaper, more reliable, longer-lived and more environmentally friendly than extending the power station’s life gave greater confidence for ­energy users.

“The later stages of the AGL plan are contingent on market responses and the resolution of policy uncertainty over energy and climate,” Mr Willox said.

“If the federal government and the states can flesh out the National Energy Guarantee and agree it, they will unlock billions in private investment to deliver a cheaper, cleaner and dependable electricity system.”

The Turnbull government has asked the Australian Energy Market Operator to analyse the AGL plan and report back by Feb­ruary.

But in a tweet yesterday, the agency cited chief executive Audrey Zibelman as saying “resisting the energy transition is like trying to resist the internet”.
The Australian

Where the article above points to power prices being “driven by market conditions that require high prices — sometimes spiking to the maximum $14,000 per MWh”, those market conditions are primarily driven by weather conditions (see above – the entire output in July from every wind turbine connected to the Eastern Grid – with a total capacity of 4,395MW).

As pointed out in this post back in August 2015 – South Australia’s Unbridled Wind Power Insanity: Wind Power Collapses see Spot Prices Rocket from $70 to $13,800 per MWh – routine wind power output collapses allow the likes of AGL and Origin to use their conventional generation assets to extort phenomenal sums from the grid operator, just to prevent blackouts and load shedding. Over the last 2 years, the situation has only got worse.

Innes Willox has been in on the greatest rort of all time, from the very beginning. He’s sat on Union superannuation fund boards and, in that capacity, has directed hundreds of millions of dollars of workers’ retirement savings into wind and solar power outfits. Willox has been pushing the renewables rort with all the zeal from you’d expect from somebody with plenty of his own skin in the game. So, it comes as no surprise that he is out there pushing the line about dreaded uncertainty preventing him and his mates at AGL from riding the gravy train forever.

Then there’s Audrey. Pick up your Collins Picture Dictionary, look up ‘zealot’ and you’re sure to find an image of Audrey Zibelman. She spent years helping to destroy New York State’s power supply, as the wind industry’s go-to-girl.

After Donald J Trump took up residence in the White House, Zibelman – who was all set to help Hillary Clinton destroy America’s entire energy system – headed Downunder to do just that to our once affordable and reliable power supplies.

It always pays to treat with serious circumspection statements by boffins about the ‘inevitable’.

Especially when their predictions are based on a wholly unsustainable economic model.

There is NO market for wind power, delivered in fits and spurts at the whims of mother nature, it simply has NO commercial value. Absent massive subsidies and/or mandated targets which force them to take it, no retailer would touch it with a barge-pole.

Note to Audrey: Internet services don’t disappear for hours, and even days, on end simply because the wind stops blowing. So, hardly the most meaningful of comparisons.

And retailers make money, funnily enough, from selling power to householders and businesses: with tens of thousands of householders unable to afford power, at all; and others reducing their usage to a trickle; with thousands of businesses and whole industries pushed to the financial brink, there’s nothing ‘inevitable’ about power consumers sucking up Zibelman’s so-called “energy transition”. Unless, of course, they’re ready for a transition to deprivation and misery. Welcome to your wind powered future. A future run by callous zealots.