Australia’s power pricing and supply calamity is the product of policies deliberately designed to wreck reliable and affordable power supplies. Massive and seemingly endless subsidies to chaotically intermittent wind and solar have done what they were designed to do: drive the owners of reliable coal-fired power generators to the wall, by allowing wind and solar generators to occasionally deliver power to the market ahead of the cheap and reliable stuff.
The relationship between weather-dependent wind/sunshine dependent solar and rocketing power prices is crystal clear; see above the trend identified by Dr Michael Crawford a couple of years back, a trend which continues mercilessly upwards (read on).
Thanks to the erratic and occasional delivery of wind and solar, wholesale power prices are surging out of control and major energy users are simply being chopped from the grid when wind and/or solar output hits the floor. And this is just the beginning.
This is a country with more MWs of wind and solar per head than any other country on earth, so power punters ought to be feeling the benefit of all that ‘free’ wind and solar power, by now. But, contrary to the cheap renewables myth, sunshine and breezes aren’t delivering the promised ‘free’ energy Nirvana. Instead, retail customers have just seen their power bills double, with much, much worse to come.
Small power retailers LPE, Discover Energy urge customers to switch to Energex or Ergon
19 May 2022
Thousands of households have been slugged with a doubling of power prices after retailers passed on surging costs, sparking fears some operators may collapse under the weight of volatile market conditions.
Queensland’s LPE, with over 20,000 customers, said it was strongly encouraging customers to find alternative suppliers following its decision to increase charges by over 100 per cent on June 1.
“Within the next 24 hours, we strongly encourage you to seek an alternative supplier,” LPE chief executive Damien Glanville said in a letter to customers seen by The Australian, telling them to switch to either of the big players in Ergon or Energex.
“We understand the financial pressures families are current facing and we did not want to have to materially increase our prices which would have added to this stress.”
The Sydney-based Discover Energy, co-founded by young Rich Lister Anson Zhang, also said it would have to nearly double rates for some customers due to an “unprecedented increase” in the cost of wholesale electricity.
The huge price jumps among the second-tier retailers will stoke broader concerns that smaller Australian electricity operators could follow the fate of UK retailers where nearly 30 energy companies have collapsed after failing to hedge against rising wholesale costs.
The Sydney-based retailer which operates in NSW, Victoria, South Australia, Queensland and ACT called on the federal government to subsidise prices given the growing crisis unfolding.
“At a time when consumers are already feeling the pinch around the rising cost of living, this issue needs to be addressed. We’re calling on the Government to look at ways to subsidise and stabilise these unsustainable wholesale energy costs in a similar way that they have for motorists at the pump. As soon as prices are reduced, our customers can rest assured that we will pass on those reductions,” Mr Yu said.
Wholesale electricity prices jumped by 141 per cent in the March quarter from the same period a year earlier.
LPE said it had never seen such volatile conditions in the market.
“If you’re a small energy consumer in Queensland right now, you’re about to see your energy prices double,” Mr Glanville told The Australian.
“Small businesses are going to struggle and if you’re a commercial and industrial customer right now and you’re going to the market to get energy, some of them are just saying we can’t afford this energy and we are going to shut down.”
Small Australian retailers face collapse, price comparison service One Big Switch said.
“The UK had a 54 per cent increase in the government price cap in April and two dozen retailers have gone under,” said Joel Gibson from One Big Switch.
“Power prices are now the number issue in the UK‘s cost of living crisis. Australia’s starting to look like we could be next.”
Mr Gibson said another retailer ReAmped emailed some NSW customers last week to notify them that usage rates were rising by 43 per cent, increasing an annual bill by around 28 per cent or $273 for a typical home.
“We’re going to see more and more price hikes over the coming weeks and we can only hope they’re not all at this level,” Mr Gibson said.
3 thoughts on “Prices Double: Obsession With Subsidised Wind & Solar Causes Runaway Power Prices”
Blank stares from political pundits on polling day when asked, “If economics is a man-made system, why is it unpredictable?” &, “Is RE bringing the vagaries of the weather inside?”
Much like asking if preferential voting means that runners pick the winners.
If someone is elected on preferences there’d be no kickback expected would there?
Ho hum it’s down the gurgler we go with inner city Labor, Greens & Teals – Simon Holmes a Court is laughing. Labor (& NLP consensus) helped destroy our economy & financial sovereignty but now says it wants more industry.
It’s as bad as UK PM Boris Johnson breaking the law (let’s party) & Our Queen not caring.
Over governed by the overpaid who ask the unqualified what’s best to do.
Diversity, Inclusion & Equity, or DIE not to have the best qualified for the job.
Laissez faire subsidies all round.
Mr. Yu wants the government to subsidise and stabilise the price of energy. Hiding the cost in your tax bill doesn’t make it go away.
Now that Australia has elected a frightfully green government, there will be nobody with the intellectual ability to fix this for at least 3 years.