Thanks to Big-Gov’s Renewable Energy Target, big corporate greed was unleashed:
ABC — Australian energy giant AGL ‘gouged’ customers after Hazelwood closure, new research shows
Some of the nation’s biggest energy companies have allegedly used the closure of Australia’s dirtiest coal-fired power station to price gouge customers and make an extra $3 billion in wholesale profits, according to a new report.
We already knew that renewables are so poisonous they make other generators more expensive. But this is something “extra”. Either big corporate’s suddenly turned into greedy machines or the government destroyed the free market that worked fine for years:
When the closure of Hazelwood was announced just a few months earlier, AGL increased the price of much of the coal-fired power on offer from the Bayswater and Liddell plants in NSW.
The study found a significant part of the output from the Liddell plant was repriced from $40 to $60 per megawatt hour, to greater than $5,000 per megawatt hour — so expensive it effectively restricted supply.
At the same time, much of the power offered by the Bayswater plant almost doubled in price, from about $40 per megawatt hour, to about $80 per megawatt hour.
AGL’s competitors, Energy Australia and Origin, hiked the prices of their coal-fired power too.
Remember when competition from cheap energy would reduce the bids of competitors?
The free market could solve this, but our government forbids it
Right now in Australia you could not legally set up a coal fired cheap plant and supply consenting adults with cheap electricity through our national grid. The government has decreed that in order to change the weather, all coal plants must charge their customers extra so they can pay off “cheap” wind and solar providers who provide green-nice-weather electrons. The government also says that when these green electrons are available (randomly) the market must buy them and ignore cheaper options. Both Liberal and Labor governments endorse this socialist control. Voters who want cheap electricity need to pick “something else”.
Where is our major free-market party?
Did he just admit wind and solar couldn’t supply cheap energy?
Mark Collette from Energy Australia, has denied price gouging, and says that there was no cheap energy available to replace Hazelwood brown coal.
“I think the market did everything it could to replace that energy as cheaply as possible but there was no source of cheap energy available in the timeframe.”
For some reason, all that new cheap wind and solar are not filling the gap left by the 53 year old Hazelwood coal plant?
The ABC finds a government funded “independent” spokesperson to lay the blame at big corporates:
Bruce Mountain, the lead researcher and director of the Victoria Energy Policy Centre, said the price increases flowed through to consumers, and the effects were still being felt.
“[Consumers] are paying roughly $200 more than they should and that’s ongoing,” he said.
“Hazelwood should not have had such a large impact on the market. It was about 5 per cent of the national coal generation market, it was not a big deal. It should have been handled easily.
If the government funded ABC had asked an actual independent commentator (like me) I could have told them that actually closing Hazelwood was a big deal and for blindingly obvious reasons. Even though Hazelwood closed in autumn, during the low demand part of the Australian year, in its last month it was supplying wholesale electricity for $30/MWh and providing more electricity than Australia’s entire wind powered fleet.
How could prices not rise when we force out one of the cheapest most reliable providers?
ABC reports on evil capitalists — says nothing about big-bad-government
The ABC is happy to say that AGL is being a big greedy corporate. They won’t admit that it was government rules that caused cheap coal to close and made it possible for companies to legally screw billions out of the market. They won’t admit that if wind and solar were really as cheap and reliable as coal that AGL, Origin and EnergyAustralia couldn’t have done this.
It’s all legal, but couldn’t have happened without the RET (Renewable Energy Target)
The Australian Competition and Consumer Commission also examined the price rises, according to its chairman Rod Sims.
“We did not find a breach of the law, because it’s not against the law, it’s not against competition law or consumer law when you’ve got something that’s relatively scarce, to price higher,” Mr Sims said.
“So if I buy an apple for $1 and sell it to you for $10, I’ve ripped you off but that’s not against the law,” he said.
“There’s no law that stops people charging excessively.”
The RET makes sure that coal fired stations are working at a competitive disadvantage. That was the point — to force coal generators out of business, and it’s working.
AGL was given Liddell coal plant for free in 2014. It plans to shut it down in 2022 and despite pleas to sell it or revive it — it turned down offers of a quarter of a billion dollars.
When is an asset is worth more in the trash-can than sold to a willing bidder? — when the market is so screwed the owner makes more profit from destroying an asset than selling it.
Handy questions ABC journalists could’ve asked
- If solar and wind are cheaper why did prices rise after Hazelwood closed?
- Don’t the comments by Mark Collette demonstrate that renewables can’t yet replace cheap brown coal?
- Why did our national electricity market work so well to create low prices and competition for years and then fail recently? Australian electricity wholesale costs were around $30 per MWh for years, now there are almost no settlements at these prices. Surely the big three corporates would have taken the opportunities to profit in the past if they could have?
- Is there any country around the world which has a high penetration of intermittent renewables and cheap electricity? Please name them…
- Isn’t this another hidden cost of intermittent power — how the irregular supply affects other generators and raises their costs? eg.Stacy, 2015, showed wind generation makes gas power 30% more expensive.
h/t George, Dave B, El Gordo
USEFUL LINKS
Australia closed a cheap coal generator and electricity got 85% more expensive
Hazelwood Countdown: 53 years old and making more electricity than Australia’s entire wind industry
Might be somewhat O/T but check this (Tony in Oz?)
“These countries are leading the charge to clean energy”
https://wattsupwiththat.com/2019/03/24/these-countries-are-leading-the-charge-to-clean-energy/
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In comments
” HotScot
March 24, 2019 at 3:27 pm
nicholas tesdorf
That’s probably the biggest takeaway from this article.
“Look at how much we’re not doing and the world still isn’t boiling.”
“
70
Was listening to the author of the report being interviewed on the ABC and the guy was delusional to say the least , he claims there have been no impost to coal that could account for any recent rise .
Didn’t Dan put a 300% tax on brown coal .
The guy said we had more than enough electricity to cover our needs even with Hazelwood closed , so I’m thinking yep delusional.
160
When lies become facts,
and almost no one cares a jot,
you know your country’s …
well you know. 🙁
150
China’s coal production increased by 3.3 percent in 2017 to over 3.5 billion metric tons—5 times greater than that of the United States.
China consumes just over half of the coal consumed worldwide.
U.S. Coal Exports Increased in 2018 as Countries Continue Their Consumption of Coal
https://www.instituteforenergyresearch.org/fossil-fuels/coal/u-s-coal-exports-increased-in-2018-as-countries-continue-their-consumption-of-coal/
Australia
“Despite most developed countries cutting back on coal, a deal was signed to develop two new 1,000-megawatt coal-fired power plants near Kurri Kurri in the New South Wales Hunter region of Australia.
The investment company Kaisun Holdings announced it had signed a memorandum of understanding with a Chinese state-owned power provider and a tiny Australian private company to build the two 1,000-megawatt power stations.
The estimated cost for the two units is between $4 billion and $5 billion, and would require a government capital subsidy of about $2 billion.
Australia has been suffering from rapid deployment of renewable energy which has rendered its grid unstable and there is a need for baseload generation to back-up their systems.”
81
I commented on this at the earlier Thread, and here’s the link, with the full explanation.
Tony.
[And I’ve copied that comment to here. Thank you Tony! – Jo]
———————————–
I was sort of waiting for the usual suspect to come in here and comment on how those ‘feelthy derdy’ coal fired operators are gaming the system.
I mean, it makes a much better headline about COAL gaming the system, than a headline like wind and solar plants gaming the system, eh.
This is what happens when you let journalists loose on something they know nothing about. They interview someone, nod in all the right places, and then, with no understanding at all, write their headline piece.
I don’t know how many times I have to explain this.
Look at the generic graph at this image, and this shows the wholesale cost structure for ALL power generation in the AEMO.
Now, while this just shows the typical half hour period for costing calculations, what you need to do is to stretch it out across a longer time period, the horizontal axis showing time.
The EXISTING base, that bottom brown colour can be anything as high as 20000MW PLUS. That is every single plant on line and delivering power. The bulk of it is already coal fired power. It also includes wind power and solar power as first in and all in no matter what they are already delivering. Coal fired power making up the bulk of this total can, as I have often said, ramp up and down across the day, and that extra they deliver is ALWAYS in that bottom dark brown colour. As (if it ever happens) wind and solar rise on occasion as wind picks up, or it’s around Midday, then their power is (first selected remember) also ALWAYS in that bottom colour, existing power.
As more power is needed, then it goes up that colour scale you see there, and the costs of running those plants is way more than the existing ones, already on line and delivering their power.
However the extra power is NEEDED, so they have to use it. What that does is add that new plants, or plants to that costing structure, as you can plainly see from the generic graph there, keeping in mind that some plants are horrendously expensive,
BUI BUT BUT, they NEED the power, or there are blackouts, so they have to come on line.
Now comes the kicker.
At the end of the half hour (indicated on this generic graph) the costs are totalled, and then averaged across that half hour.
And then, ….. wait for it ….. EVERY single power plant on line during that half hour gets that same average price for ALL the power they deliver during that half hour.
Did you get that. EVERY power plant. Not just the coal fired plants, but all the wind plants all the solar plants all the hydro plants all the natural gas fired plants, all those smaller Other sources. the LOT of them, all get the same.
SO, stay with me now, if you are coal fired power delivering 70% and more of all the power, then it’s painfully obvious that you will get more.
However, the biggest part of all this is that the power is actually NEEDED for consumption. They just have to have that power in place.
Now, the closure of Hazelwood has a direct bearing on this.
All of Hazelwwod’s power was always in that bottom dark brown colour.
Take that away, and keep in mind that the power is always NEEDED, then now it has to come from vastly more expensive plants, and then the cost for wholesale electricity goes, you guessed it ….. UP.
So, no, the system is not being gamed, and if it is, then wind and solar are also part of that gaming as well, but, hey, that headline won’t wash now, will it.
Journalists know journalism, not the intricacies of power generation.
There will always be people who just want to believe what the journalists have written here.
Generate the most electricity, the vast 70% of all of it, and you benefit as a side product of EVERY power operator benefitting.
That’s why those last in operators, the top of the colour bar have to charge so much, because they only get the AVERAGE, so they have to bid high so that average is enough to cover their costs.
Keep in mind also, that AGL also own a lot of renewable plants as well, so they win all round eh, but coal fired ‘gamers’ make for the bigger headline eh, and their blind faith followers will always prefer to hear of anti coal the most.
Tony.
240
TonyfromOz –
read what you wrote.
why aren’t you a senior energy reporter at ABC? you would be such great value for taxpayer money.
ABC is so juvenile these days, it’s infuriating.
171
Tony
I agree with you entirely. None of those reporter clowns and politicians know anything about it and won’t bother to learn either. The description that you make above sounds as if it came from the document linked below. Page 11 is the place to look!
John
https://docs.google.com/viewerng/viewer?url=https://docobook.com/download/introduction-to-australias-national-electricity-market.html?reader%3D1
10
jpm,
thanks.
I also used the image on that page of the document you refer to there, and if you note the date on that document, it’s 2010, so a little out of date now.
When I was still living in Rockhampton, I sent an email inquiry to the AEMO asking some questions about that original bid stack image, not really expecting a reply at all, thinking they were a Govt Department, and along the lines of the BOM. I got the surprise of my life when I received an answer inside of half an hour from one of the Engineers working at the AEMO, and he actually included his phone number and asked me to ring him directly. (I actually thought I had upset the apple cart and they were going to check up on me)
I immediately phoned him, and he picked up immediately. We ended up speaking for almost an hour all up, and he was the most helpful person I have ever had a discussion with from any Government Department at all.
He directed me to the newer version of that bid stack, the one I linked to in the original comment, and then he went to great lengths to fully explain it. He said that it was pretty obvious I had some idea from what I included in the original email, so I actually knew what he was on about. Whatever question I asked, he answered on the spot.
Those people at the AEMO are doing everything that they possibly can to keep the AEMO running smoothly.
When I asked him if there might be a better way of doing those bid stacks for the purpose of power pricing, he said that they often discuss just that same thing, only to always come back to this one.
I took a leap of faith and asked him if those renewables ‘players’ were using the system to their advantage, and his reply was telling indeed, saying that you would not hear him actually saying that out loud or on the record. I took that to mean what you think it might mean.
When he rang off, he followed up with an email saying how nice it was to talk with someone who at least had an idea of how things worked, and understood the technical aspects without having to explain word for word everything he mentioned.
Tony.
50
Tony
The thing that they don’t explain and I have not been able to find out about is how the renewables work into this scheme. Remember they have priority on the grid enforced by a $65/MWh fine for short fall of a retailers allotted renewables requirements according to the RET. That means someone that was tendered to supply electricity will have their amount reduced. Surely some of the suppliers who successfully tendered to supply electricity will have to miss out if the wind is blowing harder than expected?
According to the RET each retailer is annually allotted a specific amount of renewables electricity that must be purchased by that retailer and supplied to customers and the fine applies to any shortfall. As there is not enough renewables generation available to meet these RET requirements, there is always fine to be paid (an unofficial tax on electricity users) further driving up the wholesale price of electricity.
There is also the problem of when renewables have successfully tendered to supply and can’t because the wind doesn’t blow or blows less than forecast or it is overcast.
Rooftop solar also muddies the waters.
There are not explained in that document.
John
00
I’ve put this explanation to people like Simon Holmes-a-Court and he just totally ignores it…makes no attempt to refute it…which tells me they know they’re flogging a scam but are desperate for all of us to be unaware until it’s all too late.
I want complete disclosure of all vested interests of all stakeholders…all. It’s the very least they can do but no journalist’s at all interested in calling for that….and the vested interests are massive.
They desperately don’t want it known that it’s the government corruption of the market with their mandate that the intermittents must have favored status in the merit order process for dispatch and coal’s relegation thereby into standby mode wherein it’s economically and physically damaged…it’s THAT that pushes prices up.
None of the pundits with the bully pulpit on SKY or ABC…the ones with the power to really inform the Australian people about the truth of this issue that underpins absolutely every element of Australia’s economy…and bears on the cost of absolutely everything we make…do…buy…sell..build..none except Rowan Dean…is the slightest bit interested in getting at the truth of this hoax that has the power to move Australia from 1st world prosperity into the depths of 3rd world poverty.
Also people like Holmes-a-Court whose word is taken as gospel…[and even AEMO].. continually try to convince Australians that the reason there are coal outages is that this ‘old outmoded’ energy that’s actually all that keeps the lights on in Australia…is inherently unreliable….when they must know but don’t want Australians to know…that the intermittents that coal is forced into standby mode for.. to rescue them when they inevitably fail to deliver…actually damage coal plant ..chemically ..with metal fatigue…boiler problems etc…a long string of problems…remedies for which are part of the reason for that high price they all get when RE fails to deliver. It’s all detailed in studies by MIT and others.
Coal has to be compensated so coal plant owners will hang around taking the damage…because Australia’s electricity system would shut down today without coal…and if the only alternative…gas… were used instead..our electricity…and our goods… would be unaffordable.
Both parties seem to be pinning their hopes on PHES but it’s also weather-dependent…as Snowy Hydro showed in 2007 when it came close to shutting down….and Tassy had similar drought problems a few years ago.
How is it that the parties are still so hell bent on killing off the coal-fired power industry when we may be on the cusp of real carbon capture and conversion…with RMIT’s research that shows they can convert CO2 to solid carbon…no need to pipe and sequester billions of tons of CO2 every year?
The MSM has totally ignored that research when flogging CAGW…don’t want to know.
If you read the Reserve Bank’s views and their communications and coordinations with the financial behemoths worldwide…like Goldman Sachs and BNEF you begin to see that it really is just all about the money that’s to be made out of the hoax…the financial instruments to be traded…the hedge markets..swaps and all that gobbledegoop…you start to get the sense of what it’s really all about and our role in it all-as the lab rats..the canaries in the coal mine…there just as enablers and milch cows for their humungous wealth-building scam of the millennium.
10
truth:
I wouldn’t put any credence into the CO2 back to carbon scheme. It will require large amounts of electricity to reverse that reaction, in fact more electricity than was produced by burning the coal in the first place.
10
Graeme No3:
I don’t think it’s so easily dismissable at all.
The process happens at room temperature …has massively valuable applications and spin-offs…and is infinitely better than piping billions of tonnes of CO2 per year through /around Australian towns/cities ..through the regions to be sequestered near our hugely precious aquifers….whence it will leak.
It’s infinitely better too if it allows a NEM-wide HELE coal plant electricity system and a process that allows foreign buyers of Australian coal to use it in a cleaner way…keeping Australia’s biggest export industry viable.
If it turns out to be a goer it will be massively better too than the 100% weather-dependent intermittents with 100% weather-dependent storage systems that Australia’s mindlessly hurtling towards now…an unimaginable safety pins and sticky tape can of worms…completely dependent on weather…. when its enthusiasts openly shout that weather will become less dependable!
Of course the cult will sneer at it because they’ll be desperately hoping it’s not viable…such a plan being their worst nightmare with billions to trillions having been spent …and to yet be spent…on their intermittents…a huge and brutishly powerful financial network of international and local carpetbaggers expecting untold fortunes from windmills and solar panels …their wealth at our expense ensured by gormless[ or evil] government and central bank mandates that will enforce the ongoing…forever…leeching of hardworking taxpayers and their precious safety nets.
There’ll be no contest with PBS or NDIS or pensions if we’re told the funds must be spent on wind farms and batteries ‘to save the planet’ .
00
GraemeNo3…
Although the process is described as efficient and viable at scale…your view may actually prevail because it’s ominous IMO that NATURE felt the need[ or were compelled] to say the process…
…’is expected to play a crucial role in stabilising the global climate, ONCE the current transition of the world’s economy to carbon neutral energy sources has been completed.
So trillions more would be spent…massive upheaval and rejigging of the world for wealth redistribution to allow the dysfunctional often murderous Socialist/Communist dictatorships to ‘leapfrog’ over the functional democracies …and then …in that corrupted Socialist-controlled world…the Fabians having won a world war without spending a drop of blood….they’d use this process…presumably for geo-engineering by subtracting CO2 from the atmosphere …with no clue about the consequences.
Presumably radio silence on the possible potential of this process is deliberate and desperate…to ensure Australians don’t get to ask why we can’t save the borrowed squillions we’re flushing on intermittents…just wait awhile ….and see if we could possibly use our own coal cleanly in Australia…coal that inherently…without props and safety pins… provides all of the frequency…inertia…restart…system strength services everything needed for a strong stable affordable…reliable electricity system instead of sinking into 3rd world chaos and a bleak future for our children…with the CAGW cult’s ‘profound transition’.
Simplicity in Australia’s interests instead of unprecedented complexity in the interests of Global Socialism…is that too much to ask?
00
Tony….can you or anyone here tell me what the role of the existing and augmented grid will be once almost all or perhaps ALL present grid customers…households and some business…are largely independent of the grid …ie with rooftop solar and batteries formed into VPPs orchestrated by aggregators…as AEMO continually urges?
Who will be paying for the even more expensive HVDC backbone grid then…with no regular household customers?
Solar and wind farms will be in the AEMO-designated Renewable Energy Zones presumably with their own microgrids that would connect to the backbone but presumably their customers’ aims are to be largely independent of the main grid.
Who but big industry will regularly take and therefore PAY for… power from that new grid…and will they be enough to sustain it? Surely not.
The whole ongoing costs of the grid would surely be a huge impost on industry and ultimately on all of us….and especially on Australia’s competitiveness.
Can you or someone here …or maybe your AEMO contact…give us an overview of the new NEM and tell us who will take power from the grid and who will be the regular customers of it in the DER-dominated Australia that AEMO hopes for?
Could it be that we can have a rooftop-solar-with-batteries system in the VPPs and orchestrated by AEMO……with disparate microgrids in the Renewable Energy Zones…OR we can have a huge new grid with new interconnectors connecting millions of paying household and business consumers down the East coast of Australia..but we can’t have both?
AEMO’s ISP 2018 gives a lot of information but not a coherent overview of how it will look in operation.
I’d like AEMO to tell us too why Australia must be the canary…maybe the dead canary…why the one and only 1st world country that has no huge river hydro or nuclear safety nets…no interconnectors to other countries…must be the country that sacrifices itself for an hypothesis that must not be questioned …their dodgy consensus having been declared before most of the science was even done…no cloud research ..when the temperature of 70% of the earth system…oceans…could not even be reliably measured.
There is no other 1st world country whose government is deliberately harming it …for generations to come as the Australian governments…present and future…are doing IMO.
Why must Australians obey Socialist Europe and the kleptocrats of the UN to spend many billions on this half-baked ‘profound transition’ from simplicity to unimaginable complexity when we can’t fund NDIS …can’t afford to hang on to our farmlands and ports…our airports and our pilot-training?
10
Today in South Australia, at 2.00 PM on our toxic & expensive electrons !
Electricity is just a flow of electrons down a wire.
But how it is generated makes a huge difference ! Wind & solar are expensive and unstable. So not very clever !
But today is a big day for wind in the AEMO grid ! Wind in SA is delivering In SA, wind is delivering 1.2 GW vs total demand of 1-1.4 GW.
However these windy electrons are toxic !
The gas generation plants at Torrens Island has to be kept running at an inefficient & expensive low 0.3 GW to maintain grid stability.
That is without the gas generated power to stabilise the SA network it would collapse !
Also there is a surplus of windy electrons in SA. So lots is is being sent to Victoria.
And Victoria has a surplus of it’s own with it’s windy turbines generating far too much. So Victoria is sending it on to NSW and Tasmania..
Yes. those TOXIC & EXPENSIVE windy electRons have to be shared around all the states or the entire AEMO system will collapse !
What’s worse if that we are all forced to pay a lot MORE for these toxic electrons !
Bugger !
What a bloody dopey state of affairs our pollies have created !
And how can we give them a huge kick up the bum for their stupidity ?
220
Perhaps you could emulate Peter C:
http://joannenova.com.au/2019/03/weekend-unthreaded-252/#comment-2121086
🙂
30
Pounding the street s is not for me now.
But rest assured I am hard at work to achieving that end .
.
🙂
20
We get drawn into obfuscation about this way or that of generating electron flow and the Nova/Evans outfit does a splendid job of providing real info but I fear we are all sucked into missing the real point here. Electricity can be generated with virtually no sunshine, wind or coal. N.Tesla, H.Morin, J.Bedini (and many others) have demonstrated unusual ways of charging batteries and transmitting power.
We are led up the argumentative garden path with South Australia’s big Lithium ion battery bank but back in the 50s H.Coleman & R.Seddon-Gillespie patented a curious little (70x10mm) battery that became radio-active when subjected to an intense E-M field for 30 secs. For nearly an hour the “battery” would kick out over 500W of electrical power before needed a rejuvenation E-M pulse. Coleman reckons the item could be repeatedly recharged for half a century. Clearly, they worked out how to release some of the latent energy stored within the atomic structure of the copper, cobalt chloride and zinc powder layers in the 10mm quartz glass tube.
60 years later we hear little of this “battery” process yet I’m sure some have delved into it and are already using its children while we waste our minds discussing the weather.
20
If the big corporates are gouging as the ABC’s government funded “independent” spokesperson asserts, where are these profits going?
Shareholders of AGL shares get a 5.35% fully franked dividend on their holdings. That’s not gouging or anything near to it.
Origen shareholders receive a miserable yield of 1.32% fully franked. Where’s the gouging there?
The regulators have not accused these companies of gouging. So where do these people get their information?
The ABC’s Liz Hobday, Chris Gillett and Danny Tran are responsible for purveying fake news. Such behavior by the ABC has a long history. It’s an unprofessional outfit no longer fit for purpose.
The Victoria University has a reputation for poor research and prejudiced activist green/left staff. Their report is some of the best anti-private enterprise hate speech that you’d see in a day’s march.
The only gouging going on is that undertake by the ABC and Victoria University on the taxpayers of Australia.
70
This afternoon on the radio I heard a female ABC interviewer allowing a U.S. environmentalist to tell the truth about Renewables.
He criticised both cost and environmentally destructive features of renewables.
A true environmentalists.
Amazing.
111
That’s $3billion that’s not circulating in the general Australian economy. That affects retailers, service providers like myself etc. There’s less discretionary spending when households and businesses have to put more and more money aside to pay for electricity. It also adds to the cost of everything moved, produced or sold where electricity is used. Again, that’s less money circulating freely in the economy.
This isn’t difficult to understand. I don not believe the politicians and bureaucrats running this show do not understand that. I do believe that they do know it, and are deliberately destroying our economy. They, of course, are sufficiently well remunerated (by us) to not have to worry about the cost.
40
And there’s still lots of free wind and solar energy just waiting to be collected. I wonder how much more we can afford.
80
Like the yachties will always tell you – the wind is free, but the sails cost a fortune…
Cheers,
Speedy
110
Why did the 100% subsidy for renewables, paid for by domestic and small business electricity consumers in higher retail prices, courtesy of the iniquitous federal government’s large scale renewable energy target (LRET) legislation not get a mention on the ABC? This iniquitous ‘not a tax, not a subsidy’ legislation is designed to underwrite renewables, force base load power generators to cut back their output in favour of unreliable power from renewables, but supply power when the wind doesn’t blow and the sun doesn’t shine, and finally raise the retail cost of power to domestic and SME consumers to pay for the ‘free’ certificates that drive the whole boondoggle. And yet not a single mention by the politicians, the ABC or any of the folk that they interviewed for that program that most, if not all, of the disastrous problems were caused by the iniquitous LRET legislation? This amounts to a massive cover-up, to the tune of about $3 billion a year and rising (yes, every year the amount of ‘renewable’ power mandated and subsidised by this evil scheme gets larger, thanks to the ALP ramping it up when they were in government). Why will no politician mention, let alone explain how this cunning, underhand scheme is causing all these problems? Probably because both major parties have dirty hands here. And the Greens love it for obvious reasons. So why don’ t one of the minor parties or Independents blow the whistle on this scam? Are they also complicit, or have they just swallowed the ABC propaganda that coal cannot compete with ‘cheap renewables’? There isn’t much time until the federal election to expose this cover-up.
20
Yes BoyfromTottenham that’ll do it but any ABC journalist would go on its first warning after submitting such material and be rusticated or dismissed if such behaviour persisted and the story would not see the light of day. We’re coming up for twenty years of Senator Hill’s legislation and the fact of its having not yet been scrutinized is a sure indicator of its future treatment by our ABC.
10
We need a new wholesale pricing structure – it’s ridiculous that whoever bids in to supply the last increment sets the price that everyone gets paid every 30 minutes.
How about two markets:
1. For the week ahead every generator gets to bid for baseload supply, typically per Tony’s figures about 18,000 MW. Intermittent generators won’t be able to bid unless they team with a reliable supplier. Coal typically supplies about 14,000 MW. This market price would expect to be about $60/MWhr as it’s guaranteed for the year ahead.
2. For the peak market above 18,000 MW, generators now bid to supply those morning and evening peaks, that can take demand up to 24,000-34,000 MW. That’s where hydro and gas typically come into their own, although coal also participates, increasing from 14,000 to 19,000 MW. Solar won’t be able to bid because it’s unavailable at peak demand times. Wind cannot guarantee that it will blow at those times. This market price could average $120/MWhr, but only for about 3-4 hours per day. It should stop the peak of $14,500/MWhr that currently every supplier receives.
This system will force wind and solar to become reliable sources of power either through pumped hydro, batteries, or in partnership with gas generators.
And that’s what we want – reliable and affordable electricity.
40
Robber:
When did this delusion of commonsense applying in politicians minds come from?
Why do you think we (the taxpayers) are building a “free” pumped hydro scheme which won’t be working until the whole scam has collapsed?
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Robber:
You have shot down the whole Green myth about renewables being cheapest. The wind farmers etc. can bid a very low price in order to get on the list. They have no intention of supplying at that price, they’d go bankrupt, but rely on the last supplier (often their own OCGT division) to push the final price up to a breakeven (or better) final price, and they get to sell their RET certificates for the caviar.
I could offer to sell you a Rolls Royce for $50,000 (plus delivery costs) and still make money under this arrangement.
The odd thing is that a 50% renewables scheme could stuff the whole scam. If the coal burners held their supply price steady for a few months then there would be a backlash about the real cost of renewables, as they would have to charge what they really cost.
There would be little way of “topping up” the price with expensive OCGTs, and Snowy2 won’t save them as they want low price supply. And an oversupply of RET certificates would drop the selling price of them to close to worthless.
So why do you think that AGL is adamant that they have to close their coal fired plants and rely on “australia’s biggest wind farm”?
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Graeme No.3
And there you have it in a nutshell.
As I explained up in Comment 4 (and thank you Joanne for copying this across from the earlier Thread) those wind (and solar plants) are always in that lowest colour bar, no matter if they are delivering at 5% CF, or 60% CF. Their generated power is always in at that bottom price average, and mandated that no matter what they are generating, it is always used, hence in that bottom colour bar.
As more power is needed to be generated to cover the actual Demand (consumption) then the more expensive suppliers have to come in, and after each half hour the new and higher (as Demand rises) cost is averaged, and everyone gets paid the new higher average for every MWH of power they are delivering.
And even as Demand falls, they are still being paid, because their power is always in that bottom colour bar. They (wind and solar plant power) know that each day, from 4AM onwards, that average cost will always rise. They only have to see out four or so hours, from Midnight till 4AM at the lowest price.
And as you also mentioned, the added bonus is renewable power’s RET, which is just an extra added (and very high) bonus.
It’s just that coal fired power is supplying 70% of all power, so they are (quite obviously) making more money. They (coal fired power) are not gaming the system. they are just benefiting from it as well.
If anyone is really gaming the system, it’s those renewables, wind and solar plants, by bidding so low, full in the knowledge that as extra power is required, then they will get more, on top of their RETs.
Tony.
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The ‘rules’ you discuss here Tony show how cooked is our AEMO power system.
We need to revert to a system of buying the cheapest stable frequency power !
Bill
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Also, Graeme No.3, where you say this,
Just imagine what the shareholders would say if they were told that ‘Australia’s biggest wind plant’, Macarthur has a Nameplate of 420MW, but at a Capacity Factor of 30%, that’s the equivalent of only 130MW.
That equivalent is ONE THIRD the total power delivered from just ONE Unit at that clapped out, ancient old Liddell plant. So, Liddell with all four Units in operation is making TWELVE times the money that Macarthur is making.
No, they have seen what happens to the cost of electricity following the closure of Hazelwood, when the cost rose so much.
Seriously, though, I’m of the opinion that the owners of Liddell are hoping this aversion to coal fired power goes away, so they can miraculously come out and say that they just might be able to replace Liddell with a new coal fired plant.
Tony.
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Nope. AGL have planned already for replacing Liddell with
They will also explore the feasibility of a pumped hydro project in the Hunter Valley.
The Bayswater upgrade will increase output by 100MW !!! and the battery at Liddell will have a 250 MW output (no mention at all about the capacity)
https://www.agl.com.au/-/media/agl/about-agl/documents/media-center/asx-and-media-releases/2017/171209nswgenerationplandecember2017.pdf?la=en&hash=BB2DAB602AE1D1AECD85D4F2881EA665
But I’m certain that they are really planning is that when all this falls short, it will be “firmed” by a large capacity CCGT plant which will take full advantage of existing infrastructure at the Liddell site
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There is nothing wrong with the way pricing is applied across all generators. The whole point is to allow for low pricing when demand is low.
The real problem is that the rules are not applied properly to the “semi-scheduled” wind and solar generators. They do not have to guarantee supply, unlike all the other generators (including hydro) which lets them “bid” at ridiculously low rates (protected by RECs and PPAs) for unlimited amounts of generation, destroying the intent of the market structure.
As Tony stated, it’s these “semi-scheduled” generators that are gaming the system and it’s due to the exemption of having to meet contractual supply. The public have absolutely zero idea about this. They understand the RECs and see this as “supporting” renewables but they don’t see the incredible “support” that is provided by the exemption from having to guarantee supply.
I’ve said it many times – remove the “semi-scheduled” designation from the renewables and they will die, LRET or not. It’s a far easier political battle to fight than removal of the LRET.
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The “science is settled” and “97% consensus of scientists” claims are what leads voters to assume they are doing the right thing .
Until those statements of “fact” are debated and debunked with clarity through the MSM , nothing will save us from the voters .
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Ian Plimer has the figures down pat by now in his talk: five thousand respondents of which thirty-seven were extracted as relevant to the question and thirty-six of those were deemed to be in agreement with the consensus magically transformed the 97% fabrication from an otherwise meaningless actual .72%.
This technique was recently transposed to a sexual harassment survey on Australian tertiary campuses so as to generate the intended outcome. And yes, it’s those same usual suspects, human rights or some such in this case, that engineered it.
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Ah,good ol’ Bruce Mountain. A quick google search show he has been beating this drum for a good few years now
May 2011 – Australia’s Rising Electricity Prices and Declining Productivity: the Contribution of its Electricity Distributors
December 2014 – Independent regulation of government-owned monopolies: An oxymoron?
November 2017 – Our power bills fund useless investment
And a bucketload of articles at RenewEconomy and The Conversation
“independent”. Yeah.
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This is the video link of the story
https://www.abc.net.au/7.30/power-special:-part-1/10938042
Part 2 tonight looks at solar.
When I watched it last night this struck me as about the most sensible comments –
Mark Collette, of Energy Australia
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They raided the Snowy hydro and Basslink to make up the shortfall in the first instance. You’ve got to wonder who advised the incoming Labor government on Victorian power generation or indeed whether there is any expert advice at all as there is no evidence in support of its existence.
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The formula seems simple enough. The more one relies on unpredictable intermittent generation, the more valuable becomes power that can be produced on demand. Dispatchable power becomes a sellers market. To put it another way, how much is it worth to keep the lights on? Answer: a lot. Blame renewables.
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