Energy Transition Turns High Farce: Power Prices Surge 80% After Coal-Fired Plant Shutdown

Destroying coal-fired power plants is all part of the grand wind and solar ‘transition’ and precisely the point of the subsidies to wind and solar which are designed to allow the unreliables to undercut cheap and reliable coal-fired power, thereby driving coal-fired plants out of business. The inevitable consequences include rocketing power prices and rolling blackouts.

The Australian state of New South Wales has just shut Liddell (above) – a perfectly operable coal-fired plant, that once delivered 2,000MW to the grid, around-the-clock, whatever the weather.

Wholesale power prices jumped from $96 to $228 – almost overnight; an 80% increase within a week of the plant’s closure.

The loss of that volume of power to a grid already teetering on the brink of collapse, can only help ensure that result.

Liddell’s planned (yes, ‘planned’) closure was meant to be no big deal.

You see, back in March 2017 then PM, Malcolm Turnbull came up with a cunning plan to use huge volumes of electricity to pump water uphill in order to recover a fraction of that stored energy as electricity by letting it run downhill through hydro turbines.

Turnbull’s pumped Hydro plan – known as Snowy 2.0 – was meant to compensate for the chaotic output from wind and solar, filling the gaps, so to speak.

In turn, once Snowy 2.0 was up and running all of those ‘dirty’, ‘ageing’ coal-fired could be shut down and dynamited. So far, so ideological.

The construction of Snowy 2.0 has turned into a spectacular and costly debacle; the likelihood of the project ever being completed his next to nil (which we will cover in detail in a subsequent post).

It’s the mother of all white elephants and being a monumental failure, no one wants to own it.

Snowy Hydro’s former CEO, Paul Broad unleashed this week – quite rightly calling Labor’s 80% renewable target “bullshit”; he lambasted the unnecessary closure of Liddell and ridiculed the plan to close the even bigger coal-fired power plant, Eraring as a guarantee of further price hikes and blackouts.

Broad’s timely broadside went for the jugular the claim that the so-called transition would take “80 years not eight”. STT begs to differ, however.

Australian households and businesses – already suffering prices amongst the world’s highest – will not tolerate endless power price rises, coupled with routine load shedding and blackouts whenever the sun sets and/or calm weather sets in. The political reckoning will come much sooner than politicos think.

Here are three pieces detailing how the so-called wind and solar transition has just turned into a perfectly predictable high farce.

Energy prices soar as Liddell Power Station closes
The Australian
Jess Malcolm and Perry Williams
4 May 2023

Coalition analysis has found NSW wholesale electricity prices surged by 80 per cent in the first five days since the shutdown of the Liddell power plant, as energy experts warn of record high prices and reliability problems in the grid.

The average NSW wholesale electricity price in the week prior to the Liddell shutdown sat at $96.40 but spiked to $172.89 in the following week, hitting a peak of $228.86 on May 1 according to figures from the Australian Energy Market Operator.

AEMO issued at least 11 notices of a predicted lack of reserve generation capacity in the days after Liddell’s closure, sparking warnings from opposition climate change spokesman Ted O’Brien that Labor was “sleepwalking towards an energy crisis”.

Energy expert Josh Stabler said Liddell’s exit, aligned with unusually high overnight pricing events and warned supply risks were starting to be exposed with reliability a concern for the upcoming winter. “Futures price for most regions remain very robust,” Mr Stabler said. “With the exemption of winter 2022 conditions, these would be considered record high prices.”

The new figures come after former Snowy Hydro chief executive Paul Broad branded Labor’s target to reach 80 per cent renewables by 2030 as “bulls..t” after the project was hit with a fresh two-year delay.

Mr Broad accused Climate Change and Energy Minister Chris Bowen of misleading Australians about the difficulties of the nation’s transition to renewables, and hit out at Labor’s pledge to cut power bills by $275 as a lie.

Snowy Hydro chief executive Dennis Barnes on Wednesday revealed that first power from the mega pumped-hydro project was now expected between June and December 2029 at the latest, prompting fears of supply shortfalls, price surges and blackouts. …

The Australian

Ex-Snowy chief blasts Bowen’s renewables target
The Australian
Jess Malcolm
4 May 2023

Former Snowy Hydro chief executive Paul Broad has attacked Chris Bowen and branded Labor’s target to reach 80 per cent renewables by 2030 as “bull…t” after Snowy 2.0 was hit with a fresh two year delay.

Snowy Hydro chief executive Dennis Barnes on Wednesday revealed that first power from the mega pumped-hydro project was now expected between June and December 2029 at the latest, prompting fresh fears of supply shortfalls, price surges and blackouts.

Mr Broad – who sensationally quit last year after falling out with Mr Bowen over the NSW Kurri Kurri gas plant – said the nation’s transition to renewables would take eighty years, and accused Mr Bowen of misleading Australians about the complexity of decarbonisation.

He warned Australia’s national energy market was now on a “knife’s edge” after the closure of Liddell and that the nation should expect blackouts on hot and cold days into the future, as he urged the state government to extend the life of Eraring past 2025.

“The truth is with this transition if it ever occurs it will take 80 years not eight …there’s massive changes that need to occur and I’m deeply concerned about the rush, the notion that somehow this is all magic, we’re going to wave a magic wand we’ll close a peak baseload power plant that’s kept the lights on through yours and my life and the minister can float all these alternatives out there,” Mr Broad told 2GB.

“We’ll it’s not I can be absolutely 100 per cent certain its not available and the transmission lines are miles late, 2.0 which is part of it is late, and I think there are in report which tell them you’ll need at least eight years to achieve their goal and that’s 80 years not eight.”

“Eraring can’t close…even now we’re closing Liddell we’re on a knife’s edge, you watch when it gets really hot or really cold, if the lights don’t go out I’d be awfully surprised.”

“The notion that we can have 80 per cent renewables by 2030 is bull..t.”

Mr Broad told 2GB that Labor’s pledge to cut power bills through the nation’s transition to renewables was misleading and false, and that the biggest challenges for Snowy 2.0 was still to come with the project’s transmission lines “miles” behind schedule.

“The notion you can have all this occurring without transmission and all the other investment which will cost the customer, the consumer the lot…suggesting you can do all that and prices will come down is wrong. It’s absolutely wrong, it’s misleading, it’s false and to keep suggesting that I think eventually the average punter wakes up,” Mr Bowen said.

Mr Broad said he was “dead in the water” once Mr Bowen was elected reiterating that they clashed over the future of Kurri Kurri gas plant and suggested Mr Bowen was ideologically opposed to gas.

Mr Broad also said Mr Bowen’s claims that he failed to tell AEMO about previous delays in the project were “bull…t”.

“Take a big deep breath, you’re a minister now, you’ve got responsibilities, you’ve got to put it all on the line, you’ve got to be honest with everyone,” Mr Broad said.
The Australian

‘It’s bullsh*t’: Former Snowy 2.0 boss SPRAYS Chris Bowen
Ben Forsham and Paul Broad
4 May 2023

Following delays, the Snowy Hydro 2.0 project, which is promised to store enough energy to power three million homes, will not be fully operational until December 2029.

Paul Broad, who was the CEO of Snowy 2.0 for a decade, believes that Minister for Energy Chris Bowen needs to face some “hard truths”.

“The notion that we can have 80 per cent renewables by 2030 is bullshit,” Broad told Ben Fordham.

“Eraring CANNOT close…If the lights don’t go out I’ll be awfully surprised,” he said.


7 thoughts on “Energy Transition Turns High Farce: Power Prices Surge 80% After Coal-Fired Plant Shutdown

  1. Bowen and his madness has finally been called BS by someone who should grab the attention of MSM.
    It seems obvious that those that are employed in influential positions are loathe to call out the BS, their job is on the line. This should not be the case. How are you supposed to arrive at the correct decision without considering dissenting opinions?
    The uniparty that is Australian politics today are all equally to blame. The Libs/Labor/Green alliance of idiots.
    Bring on the blackouts. It is the only way to make the public wake up to the madness of this ideology.

  2. The AEMO boss said spot prices during the day in the first quarter were zero or negative for more than half the time in SA and Victoria. Who would fund a solar farm when it will lose money half the time?

    1. Wind and solar generators sell forward under power purchase agreements with retailers, which incorporate the value of renewable energy certificate – they get one for every MWh dispatched. The retailer receives the REC and surrenders it the Clean Energy Regulator which avoids the shortfall penalty, set at $65 per MWh for every MWh the retailer falls short of the Renewable Energy Target. The REC value to a retailer is at least the cost of the shortfall penalty. The wind and solar generators collect the value of the REC irrespective of the spot price. That’s why they’re in it.

      1. Thanks – that detail confirms that the market is artificially distorted and completely politicised – a dangerous place for investment, which I will continue to avoid.

  3. The scheme was a political stunt by a desperate Prime Minister. It was never properly costed with a business case taking into account the major transmission lines required and the fleet of windmills to pump the water, nor the environmental damage.

    Engineering due diligence was rushed, experienced Snowy hands from the original scheme were alarmed about the quality of discussion with planners, they were not taken seriously and they had serious concerns about the hydrology of the terrain for the tunnels.

    Modelling conducted for The Energy Realists of Australia demonstrated that the cost of power would be immense and the contribution of power would be negligible compared with the Liddell power station that just went out of service.

    See the complete list of notes distributed to 800+ politicians during 2020-2022, also to a long list of journalists and commentators.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s