Looks like a system wide failure
For years the average wholesale price was somewhere between $30 and $60 per megawatt hour for electricity on the Australian national grid. But for the entire 2,184 hours of quarter two this year, we were paying an average price of $264 per megawatt hour. It wasn’t just due to a couple of freakish spikes, instead it was a relentless burning average, like a lava flow arrived at your wallet.
At an average operational demand of 22GW, that’s a hefty $12.7 billion dollar price tag for 91 days of electricity. Last year the same period it cost $4b. Years ago, before we added all the unreliable generators, it would have cost $2 billion.
It would have been cheaper just to build a whole new power plant last year.
The graph below covers the century so far. It is that bad.
It wasn’t that there was a particular time of the day when prices were higher, instead every hour was a bloodbath. It was a phase change. There was no happy hour at this hotel.
And it didn’t matter whether a state was renewable-heaven or a den of black-coal. Prices were shocking in every state, suggesting that adding more unreliables won’t save us, just like they didn’t save South Australia or Tasmania. The whole system together is failing. (Isn’t unity wonderful?)
The system was stretched to breaking.
The one thing we know, the only path back, is to a time when the system was more flexible and had more inner strength — more reliable energy, where it had enough spare capacity to shift dependence away from gas and black coal.
Not surprisingly, it was mayhem on the bridge last quarter. The AEMO forecast more than 400 separate lack of reserve warnings (called LOR’s) in the second quarter, compared with 36 in the March quarter and 73 a year earlier.
And the pain just kept growing. Every month worse than the one before. Almost like we used up the slack in the system in April, then there was nothing to fall back on. The gas stocks were drained, the transmission lines couldn’t be fixed fast enough, and even the rivers were full, so we couldn’t run the Hydro dam without flooding the fields downstream.
I’ll have more to say soon. But while many are blaming a string of things, the truth is, there is one over-riding factor that screwed the Australian grid, and it was when someone decided to use it to control the weather. If brown coal plants were still respected, we could have left some gas in the storage vaults and saved enough money to build two hotter, cleaner new brown coal plants.
The AEMO Quarterly Report 66-page PDF
*Headline changed from “spent” to “price signal” to reflect the complexities of the Spot market prices being delayed, smoothed and spread through forward and other contracts. Total cost corrected from $12.7b to 12.1b. (typo).
According to Socialist & Labor logic and mathematics, the more unreliables we add the cheaper our power gets.
Let’s get this right Mr Bowen. According to your “grid” policies of increasing, probably doubling renewables by 2030 we should have electricity provided free of charge because the ore renewables will bring the price down.
I also believe you’re pregnant mr Bowen. Do you think you’ll be a “birthing parent” before before we have all that wonderful free electricity courtesy of free wind & free solar or will that event like your energy policies be another Labor wet dream??
692
If your yacht is becalmed, just add more sails.
781
Oz,
Assuming you’re taking the Mickey. If not suggest you stand for election. Your foresight would appeal to 95% of the Labor/Green electorate & we’d have Prime Minister Ozwatch in a flash!😵💫😵💫😵💫😂😂😂
173
96% is the universal number now.
50
Brilliant analogy Ozwitch.
201
I have a “green” son-in-law who sails a very expensive sailing boat. Both of his houses are covered in solar panels and they have two EVs, a Mini and a Mercedes (we are the poor rellies!) I think the analogy of adding more sails to his becalmed boat might just bring the message home! Thanks!
141
Or buy a fossil fuel energised outboard.
00
watch them rationalize it: e.g. “higher electricity prices means we are saving the planet!!!”
91
For whom? We won’t be able to afford to live thre.
11
-live there.
00
Behold the price of virtue signalling.
331
Behold who actually ends up paying that price.
Let me go right out on a limb and predict that no government departments in Australia will switch off their office air conditioning next Summer.
101
You’d be absolutely on the money there Tel.but the reason given by our Federal Public Servants is that, as you should know of course, the energy they use in Canberra is “green” so they can do whatever they like ….
41
That was a very fast impact of election results.
10
Not really. It’s been building for a decade; we’re still in the early days of the mess and this is entirely the design of the system, to make electricity too expensive for industry. It’s going to get much worse before everything crashes and burns in another French Revolution.
60
The scary part is instead of ordering load shedding, they are happy to have such absurd prices, which consumers would never accept.
So what is going to happen is we will be bleed slowly. It reminds we of how bulk water was increased in price by 400% in SE QLD over a period of 8 years to pay for the idiotic desalination plant. No one battered an eye lid and just accepted it.
Get ready for 30% PA + increases to power bills, which will be blamed on coal of course.
Or energy poverty period is about to begin.
Don’t underestimate the delusion of labor left. Their own policy document is claiming 18% lower power prices creating 300,000 new jobs by adding more unreliables.
500
Batted an eyelid,
Unless you seek deep fry eye. Geoff S
170
mundi
My electricity price, according to a recent notice from the supplier, has gone up by around 60% this month! I didn’t have to wait.
John
60
Here’s how to bring the price of electric city back down.
https://www.thetimes.co.uk/article/china-orders-300-million-more-tons-of-coal-to-be-mined-a-year-qqj8h2r0t?mc_cid=aa4c7b8ac5&mc_eid=cc88839e92
220
They can add that to their numerous imports.
E.g.
https://www.scmp.com/economy/china-economy/article/3151282/china-steps-coal-imports-kazakhstan-south-africa-and
China steps up coal imports from Kazakhstan, South Africa and Mozambique amid supply crunch
China has increased purchases of coal from Kazakhstan since the start of the year as power cuts have become more frequent and coal supplies dwindle
A global coal supply shortage has sent prices soaring and contributed to an electricity crunch that has hammered businesses in the world’s No 2 economy
160
It’s interesting that Kazakhstan, South Africa and Mozambique all have plenty of coal to send to China but also have power shortages.
And Australia, major exporter of coal to China, also has power shortages.
310
CHEAPER RENEWABLES – now that is misinformation.
The more accurate term – DEARER UNRELIABLES
420
” CHEAPER RENEWABLES “.
The oxymoronicness of this statement is astounding.
What is even MORE astounding is that people actually
believe it.
ESPECIALLY the people that push it.
300
‘Tell a lie often enough…’
160
“Cheaper Renewables” are a bit like cheap Chinese goods. The label price is low, but the goods soon break down and have to be replaced. In the case of solar, the first breakdown is on the very first night, and then every night.
80
One did not need to be Einstein to know we were headed for the rocks. This is what happens when ideology and fake science take the helm and no voice of common sense is allowed to be broadcast. It is an indictment of the combined idiocies of “enviro activism” and political me tooism, with no handbrake of honest media.
450
We are endlessly told by the Left that unreliables are the cheapest and most reliable way to generate electricity.
Obviously, this is not true. It is a case of DOUBLETHINK.
And I have constantly asked proponents of unreliables for an example of anywhere where more unreliables has resulted in a lower conumer electricity cost. I am never given any examples.
The only purpose of unreliables (solar, wind and Big Batteries) is to harvest subsidies from taxpayers and/or electricity consumers for the benefit of the owners of unreliable generators.
Even Warren Buffet, who supports the US Democrat Party, admitted that thè only reason he invested in unreliables was to harvest subsidies.
Incidentally, because of the billions of dollars of taxpayer subsidies on offer in Australia, Warren Buffet is now harvesting subsidies here.
280
When I have mentioned IVM to people they say that it is a dangerous veterinary drug, that’s why the Government banned it for COVID treatment.
The masses are so dumbed down now, they are not even CAPABLE of asking questions.
120
My brother contracted Covid a while back. I gave him 10 Ivermection tablets, which he took…2 a day. He is still alive and the Covid was gone in about 4 days. He was never really sick…just head cold like symptoms. The other 10 tablets are for me when/if I get the Whuhan Pox.
30
Glenn, I have observed that as well. I will make a further comment in the next unthreaded.
00
Avaricious Governments are the cause of this expensive dilemma! State, because they sold off the coal generators cheaply and Feds because they have been chasing a Green agenda and subsidising solar/wind renewables! And all for something that may never be a problem. Certainly not in the next 100 years! Whatever the temperature does humans will adjust naturally, as we always have!
330
Vales Point Power Station in New South Walestan was sold for $1 million in 2015 and two years later was valued at $730 million.
https://www.abc.net.au/news/2017-10-24/coal-power-station-sold-for-peanuts-becomes-730-million-asset/9077582
I wish I had known it was for sale, I would have bought it myself!
310
Whatever the temperature does humans will adjust naturally, as we always have!
Meanwhile
Garbage In, Garbage Out: 96% of NOAA Temperature Stations Fail ‘Uncorrupted Placement’ Standards
A study that investigated the placement of National Oceanic and Atmospheric Administration (NOAA) temperature stations found that 96 percent of the facilities used to measure heat failed to meet the agency’s own “uncorrupted placement” standards.
Research for the study shows the 96 percent corruption is because the stations’ measurements are tainted by the effects of urbanization – or heat produced because of their close proximity to asphalt, machinery, and other heat-producing, heat-trapping, or heat-accentuating objects.
“With a 96 percent warm-bias in U.S. temperature measurements, it is impossible to use any statistical methods to derive an accurate climate trend for the U.S.” Heartland Institute Senior Fellow Anthony Watts, who directed the study, said is the study announcement distributed to the press. “Data from the stations that have not been corrupted by faulty placement show a rate of warming in the United States reduced by almost half compared to all stations.”
190
The NEM and the AEMO are big conns.
I liken them to a PONZI Scheme.
But, this is one that NO ONE can escape;
unless you go off grid.
And that is looking MORE enticing every month.
170
Don’t worry… they have a plan for that.
You will be charged for the privilege of power running down your street, even if you chose not to connect to it.
They already do this for water in most council areas – you can’t opt out.
130
You can go right of the grid and it will be lower cost but significant up front capital. You would want to ensure a 10 year payback on any capital.
You can just go with solar panels and orientate them to get the best from morning and afternoon sun. Nearly all solar arrays on roofs are set up for maximising output on the basis of sending power to the grid but in many locations now, the panels are limiting on overvoltage. It would be best to set the panels up for May sunlight in southern Australia and getting as steady output as possible through the day. If you eventually install a battery then that will give the best overall value. The optimum system would include a small petrol or diesel generator. The generator does not need to be more than 1kW to dramatically lower the cost of a reliable system. Not many households in Australia use 24kWh in an overcast day.
Grid scale solar and wind will always be more expensive than what you can do at home if you have the space for panels to be located favourably. Solar panels are expensive congealed coal that produce electricity more cleanly than burning coal directly.
51
This is just a preview of what’s to come, wait ’till Liddell and it’s big brother are gone and new car buyers are forced out of ic engined cars and start to really draw from the grid.
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I think they will ban IC cars as per the plan.
But the trick will be that they ban electric cars as well because they will not be supportable on wind and solar. You need coal, gas, nuclear and hydro plant to charge EV’s.
Thus, the Left will have achieved a long term objective of both banning IC cars and banning ALL personal mobility as individual car ownership by non-Elites represents personal freedom which they hate so much.
210
Since the only purpose of unreliables is to provide taxpayer subsidies to the Elites, why not just transfer money directly from the bank accounts of ordinary people to the Elites?
This will be a win-win situation because
(A) it will be unnecessary for Elites to build unreliables in order to harvest the subsidies. The cash will go directly to their bank accounts from ordunary people and
(B) because no unreliables have to be built in order for the Elites to harvest the subsidies, we can continue to enjoy traditional means of inexoensive, reliable coal, gas and hydro generation and for people in mature countries, nuclear as well.
220
Spot prices are set by the highest bidder every 5 minutes. If hydro, gas and diesel in that order are required to meet peak demand, they will bid high, and then everyone receives that price.
OpenNEM shows how the generation mix changes throughout every 24 hours and the price varies.
The current high prices for gas are a major cause of the high spot prices.
WA, with a secure gas supply, continues to have wholesale electricity prices below $100/MWhr compared to $300/MWhr in the east.
100
The clown in charge of WA hasn’t figured out yet how to
charge higher prices for electricity.
He’s too busy with his borders.
121
OTOH he is still a politician.
Retail customers just got a $400 credit on their electricity bills.
I wonder if the price of electricity will influence the size of connections to the grid. 100 amp (sometimes 200) at 240v in the USA but limited to 32amp at 240v here…..
How does that reconcile with my 4 20amp split system a/c units?
20
The 4 split systems was a rhetorical question. I have 2 as backup systems.
I am finding that my 32amp 480v connection may/will need to be reduced to 16 amp 480v if I want to add a battery to the solar system on the roof.
10
Hard beleive isnt it, that we sit on a good chunk of the worlds coal, gas and uranium proven resources, and yet via our succession of bumbling , short sighted and dogma riďden governments, we choose to torture ourselves.
Donald Horne was absolutely correct with his damning comments that backed his often misused “lucky country” remark
280
Rational thinkers are not going to win the argument against supposed anthropogenic global warming or the use of unreliables on scientific grounds.
The masses are too far dumbed-down for that.
We have to start promoting awareness of the whole unreliables scam as an unfair and iniquitous means to take money from the poor to transfer it to the Elites.
210
It would be nice if Anthony Watts’ “96% of weather stations” could take over the public sphere from “97% of scientists”. The end of net-zero could come very fast.
180
Now that graph is a hockey stick. Amazing how one fraudulent hockey stick transitioned to a real one. Lies do have consequences and gullible politicians and weak journalists got us here. Who will get us out?
110
The world had such a person.
President Donald Trump.
And look what they did to him.
201
And they haven’t finished with him yet,
but neither has he finished with them.
131
High gas prices contribute to Australia’s high electricity prices as mentioned by Robber above.
And how is it that Australia pays such high prices for natural gas, and the Chicomms pay some of the world’s lowest for the same Australian gas?
That was the doing of that nasty little pretend conservative PM Howard and the gas supply contract signed under his auspices in 2002 to give Australian natural gas to the Chicomms on a bizarre 30 year contract with no provision for inflation or market prices.
You don’t get any dumber than that.
140
I think I heard 6c/litre some time ago, that couldn’t be right…. could it ?
30
When the contract was signed the price was only slightly over the cost of production and remains at that price over the 30 years of the contract. No adjustments for inflation or market price.
6c per litre equivalent is what I’ve heard as well.
40
Yes, and reading that Article, the LNG Contract cannot be renegotiated until the year 2031. I just cannot believe that anyone would have a Contract that goes for that long without a clause or clauses to cover price increases over time. There is not even a CPI index clause increase I believe.
What a great example of the so called ‘Clever Country’ at work………..lol
130
The only good news is that awful Chinese deal expires in 2031. I hope whoever renegotiates it has some experience in bargaining for a Turkish carpet otherwise we are likely to be ripped off again. Maybe we can give Erdogan a dealmaker commission to act as a broker.
00
Time for Tassie to cut the (bass) link…
20
Why would they do that, $$$$$$$$$$$$$$ to be made from the dumb mainlanders.
60
True – but those dumb Tasmanians will be wondering why they too have to pay so much for the power THEY ALREADY OWN
20
And then when the next drought arrives?
00
We still have all diesel generators we had to buy from the last time our Dam levels fell dangerously low.
& BTW the Dam levels did not fall to dangerously low levels because of any drought … Dam levels because of dangerous profiteering over a Carbon Tax!
40
Perverse incentives are at the heart of the racket which is Australian energy policy.
00
Thought they rented them?
00
Create scarcity and then gouge the supply…this is the Enron playbook!
80
No wonder Mr Cannon-Brookes is busting his britches to get in on the play, $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
90
His core business is harvesting subsidies, not producing energy.
100
Energy prices are high because coal and gas prices are high and the power stations keep breaking down. Prices would have been even higher if renewable energy sources did not exist, because there would be less supply.
342
No, it is not so simple, Simon. Brown coal would have remained a very cheap (The Cheapest!) as it is too heavy to sell abroad. Since Australia closed its brown coal fired generators, Germany has opened the largest brown coal fired plant in the world, but it is only one plant.
200
What, less than next to nothing.
50
Simon, I find it terrifying that you appear not to be a troll, but you genuinely believe the propaganda force fed to you.
There is no limit to the evil an indoctrinated person can be induced into doing.
And there are many more like you, a likely voting majority, in fact.
230
Correct David. I’m amazed at the amount of people who believe CO2 is the villian, and that coal and gas are terrible forms of energy. The truth is easy to find in reality, but they simply don’t want to hear it or are so convinced by policitians and the lunatic media, that they have decided it is gospel.
I am left wondering what they will say/do when this planned disaster all comes to a head…which it is going to, and not that far off !
110
That’s what happens when the power stations are not maintained properly. The best car on the market will also break down and become expensive to fix if it is neglected like our coal fire power stations are.
Over the years, as more renewables were put into the grid, and coal was simultaneously taken out, prices have rocketed up. It’s really not hard to put two and two together. More renewables, less coal == more expensive electricity.
170
Jacko
A couple of points around that.
I’m not sure what happens now but in days past your new Rolls Royce came with a nicely fitted tool kit. In earlier days even with a crank handle.
Which leads to the owner of one such being harangued by an onlooker that “If it is the best car in the world why’s it still got a crank”. Which eventually lead to the retort –
When you go home take off your shirt and stand in front of a mirror. On your chest you’ll see a couple of spots. Which, like the Rolls Royce crank handle, are there just in case”.
And, for a long time, I was curious as to why pretty modern dozers ended up in wrecking yards. Repairing one involved things like welding up worn chassis bearing areas with overhead welding and then reforming with an air grinder and burr explained it. If it is let slip it is not economical at commercial rates to fix it.
And I guess the same for scheduled maintenance on power stations.
10
‘ … because there would be less supply.’
Its still not base load power, Origin did alright.
https://reneweconomy.com.au/origin-reports-lng-earnings-windfall-but-is-still-scratching-around-for-coal/
10
yes Simon, I agree with you. No is able to explain why coal is produced using Australian Labour, transported to the power station using Australian trains, suddenly increases in price.
For example, and not even leaving the Aussie mainland look at how things are done in Western Australia. No sudden price rises there, and they have tem same mix of generation types
311
This is not true. If only the government would stop interfering in the market and stop mandating the sources of supply!
The rise (the excessive rise) in price is mainly due to government subsidies on solar and wind generators, hot water services, light bulbs, meter ad-ons, etc., and various bans and mandates.
181
Yes of course Simon, that totally explains why Tasmania has high energy prices. yep, coal and gas.
Any generation plant will have problems, if you run at maximum, reduce maintenance and take away redundant units so outages become become impactful. This is exactly the recipe for coal for more than a decade and doing all this while you become ever more dependent on that which you destroy.
140
Remember that market prices haven’t completely hit the consumer yet:
https://newsroom.unsw.edu.au/news/business-law/energy-crisis-why-are-electricity-prices-set-rise
I forgot another reason: The significant increase in demand is linked to recent extreme weather events. Some might even blame these events on climate change.
012
Simon, did you even read the AEMO report? Para 1.1.2 Demand Outcomes says:
“NEM quarterly average operational demand increased to 21,932 MW, 126 MW (+0.6%) higher than Q2 2021,
driven by a 279 MW (+1.2%) increase in average underlying demand, offset by the lowest Q2 year-on-year (YoY)
increase in average distributed PV output4 (+152 MW or +12%) in recent years (Figure 2).”
Not exactly your “significant increase … linked to extreme weather events”. No bonus payments for Industry Execs for that sort of growth.
And you know that AEMO only estimates the distributed PV output – they have really no idea how much they have.
They talk about “PV impact” and “Underlying demand” as estimated values in yet another crazy and misunderstood model.
It’s not like they can actually measure it in 5 min intervals. Installed smart meters are just not that smart. Pity we baked that technology investment way too early.
But tell me, as weather dependent generation suffers lower output during bad weather, doesn’t that mean Solar & Wind are bad as the climate changes?
Aren’t those folks that blame climate change for extreme weather, shooting down the renewable/unreliable argument for solar & wind?
Extreme weather must be just the same as night (for solar) and wind droughts (for wind). That is, on the “to-do” list.
40
Why is it so expensive, same amount of coal being mined and more opening? Some is being from different suppliers, that’s all that’s changed, same with oil.
We have been destroying grids on a global scale yet the consumption of coal increases?
Same problems in every country, at the same time.
The thing with you self-proclaimed “intellectuals” is, you’re not very smart.
00
A great Post.
Australia, please put the Electrical Engineers back in charge of the Electricity Power Grid Network before the whole system crashes and burns.
230
How many available electrical engineers are there now?
Most younger students opted for simpler degrees.
And those few that were smart enough to do EE are mostly fully indoctrinated and will work on woke solar and wind projects.
180
Indeed, David. I was asked to come out of retirement to teach Senior Engineering Capstone one more time this past year. I hope it is my last time teaching that that particular course. What occurred in this last year is the following:
We suggested over a dozen projects for students to work on in teams.
Three of these projects involved renewable energy, and two others involved fossil fuels. Of the two fossil fuels projects one involved natural gas production on the Pinedale Anticline (but which is more widely applicable) and the other involved a safety system for use in an open pit coal mine.
No students chose the fossil fuels projects but instead so many jumped into the renewables projects that the teams became too large for really optimum learning on real-world projects (twelve in one case!).
Such is the state of “higher education”. The cult-like thinking of climate change is impacting all education, even performance based independently credentialed curricula like medicine, engineering and law.
80
So I suppose the Pandemic lockdowns, mandated non-vaccinating vaccines, and the collapse of energy systems are completely unrelated things.
Even when you have the most expensive governments money can buy, ya’ just get a string of bad luck.
No refunds.
90
Wait … the purchasers of the governments are doing great.
It’s us conscripted contributors that are FUGAZI.
40
The comment in the final paragraph shows the absurd folly of Green thinking on energy:
“…the truth is, there is one over-riding factor that screwed the Australian grid, and it was when someone decided to use it to control the weather”.
160
Australia’s future will be solar and wind unreliables and Big Batteries supplemented by a trickle of real hydro power and a large number of domestic house batteries to grab power when it becomes randomly available.
Electricity will be far too expensive for most uses and deemed a luxury.
Uses will be mainly restricted to limited domestic night time lighting and occasional use of TV to receive government propaganda broadcasts for 30 mins 600pm-630pm in the evening.
Street lighting will be unnecessary as there will be no cars.
Most activities will be done by daylight.
Australia will receive limited income from sale of mineral resources to China at bargain basement prices.
150
That sounds like a Nightmare. Time to wake up Australia.
70
That’s a hockey stick I can believe in!
60
AGAIN here’s the King Island system and today wind is currently supplying generation sometimes, solar is very limited, battery is FLAT as usual, but Diesel back up is ESSENTIAL.
And if this tiny experiment can’t work then obviously wasting endless billions $ for an Australian wide disaster is just more of their delusional nonsense. Read more from Francis Menton and WAKE UP.
https://www.hydro.com.au/clean-energy/hybrid-energy-solutions/success-stories/king-island
80
The island is a perfect model for the mainland with the only my difference being that the island has a diesel generator instead of coal or gas.
Just as the island relies on the diesel generator or it’s LIGHTS OUT, so too with the mainland and coal and gas power stations.
70
What does retail electricity cost on King Island?
50
King and Flinders Islands supply, all customers
Daily services charge 75.86 ¢ per day
Daily meter charge 7.44 ¢ per meter per day
Tariff 51 (energy all units) 25.95 ¢ per kWh
60
Just depends when you look, just like South Australia
At 2:10 PM it looked rosy , plenty of wind and solar, battery charged and diesel no running.
The story is in annualised numbers rather than snapshots
20
Problem solved.
New wave generator claims success.
https://www.abc.net.au/news/2022-07-31/wave-power-generator-supplying-king-island-with-electricity/101282070
Maybe? The ABC thinks so.
Cheers
Dave B
20
https://www.afr.com/companies/energy/coal-generation-in-queensland-and-nsw-hit-record-q2-low-20220728-p5b5ge
Coal generation in Queensland and NSW hit record Q2 low
Colin PackhamEnergy and resources reporter
Jul 29, 2022 – 5.00am
Australia’s historic wholesale electricity price was fuelled by a record Q2 low output of coal generation in Queensland and New South Wales, data from the Australian Energy Market Operator showed.
The data from AEMO illustrates the extent of the coal outages which coupled with record commodity prices have underpinned surging energy inflation, pressuring households and leaving scores of businesses struggling to stay afloat.
A spate of coal power stations were forced offline earlier this year as Australia’s ageing infrastructure suffered unexpected faults and breakdowns. This in turn necessitated unscheduled outages for repairs and maintenance, which were delayed by surging COVID-19 outbreaks.
SEE LINK FOR REST
30
Those unexpected faults and breakdowns should not have been unexpected. They are a predictable consequence of the war on fossil fuels in which some power stations are closed so the pressure on the remaining ones increases, and at the same time they get run as backup instead of the baseload they are designed for. On top of that, all incentive to maintain them is removed. As I have often said, the Law of Unintended Consequences is mis-named, it should be known as the Law of Predictable Consequences.
50
This is not just a Lefty Green Govt issue.
AEMO is controlled by nuts.
If AEMO started to trade in a minimum supply block of 4hrs or more (not the idiotic 5min) it would not screw the market.
Make the renewables trade on longer blocks and make them install stabilising assets.
130
It is not AMEO’s fault! It is being maligned. The may not be perfect, but they are simply administering the market rules. Besides, look at my comments below. It is not as bad as it is reported.
10
Thats the logic Councils hide behind. The rules clearly dont work. Is the AEMO showing any initiative to push for change?
50
Gerard, the AEMO have been run by two renewables fans for years. They say things, and advocate positions that don’t make any sense if their aim was to have a reliable affordable grid.
80
What a sensational headline. Pity it is not true.
Nobody paid that much for electricity. Most of this money was retuned by generators to retailers under the mutual “Contracts for Difference” they have between them. Only retailers that were “naked” in the market, i.e. without contracts, would have been exposed. I doubt there would be many of these. Otherwise they would have gone to the wall.
Unfortunately most reporters are unaware of and do not understand the operation of CFD contracts and until they do we will continue to get these misleading headline. I wonder why market participants are so quiet about this?
52
‘I wonder why market participants are so quiet about this?’
The MSM hasn’t explained the situation as it exists.
https://www.aemc.gov.au/energy-system/electricity/electricity-market/spot-and-contract-markets
30
I notice that in this extensive report the term “Contract for Difference” is not mentioned even once. As if these contracts do not exist or do not matter! They are crucial to how the market functions. Thanks, by the way, for highlighting it.
41
Semantics about timing really , those contracts will expire and new ones will be a different deal entirely.
30
Gerard, from the AEMO report Electricity suppliers are already paying out for expensive forward contracts for next year, and at an average of $168 / MW (at the end of June). The traders are not expecting prices to return to previous levels. Q3 prices for 2022 in NSW were even higher – $309. Queensland almost as high as NSW.
This has the hallmarks of a phase change. We have broken the system. Correct?
The wholesalers who sold contracts last year for delivery in Q2 2022 and didn’t see the major price rises in coal and gas coming sold their contracts too low and will want to recoup their losses, which is part of the reason why forward contracts are rising. Yes?
And smaller retailers don’t have the forward contracts and they are the ones that are already going broke at these prices. I did keep things very simplified, perhaps too much, but the $12b bill means something very real — compared to past costs it shows how blistering the price rise will be, even if it is blurred, delayed or spread in the retail price signals.
In a sense the $12b will be realized but spread through coming months unless the situation is fixed much faster than the traders expect. So what would be better wording — the value of a quarterly electricity bill of $12b? A nominal cost? An estimated cost?
The price signal from the markets suggests that we could have built a new HELE plant last year and we would be better off now.
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All of which goes to prove, without the slightest doubt, that two enormous lies have been sold to us by our economists and our governments;
1. Privatising the grid and the gas supply system, and,
2. Any attempt to move to renewables
do not, and never will provide competition which will result in lower prices.
Next time anyone tells you something that sounds too good to be true, you can absolutely believe that it isn’t true!
140
Where does all the money come from and where does it go?
Why ask, you think.
Say a person owns shares in a large mutual fund.
Are some of the companies getting large payments from the grid?
Are residents and businesses paying?
The person owning shares in the fund might be feeling guilty.
Asking for a friend.
21
This is a good question.
Say a generator and a retailer have a CFD for fixing the price at $50/MWh. The spot price is $5000/MWh . The retailer buys from the pool at $5000/MWH but is refunded $5000-$50=$4950 by the generator (less AMEO costs). So the electricity is only costing the retailer $50/MWh.
Simple, is it not?
40
Gerard, the CFD costs something in the first place. That’s material.
People need to understand the wording of the contract (what is both the buyer and seller of CFD committing too at the time of purchase and for what price was that obligation sold?)
20
The AU system seems designed to confuse.
I looked at this AU page:
https://moneysmart.gov.au/glossary/contracts-for-difference-cfd
and this UK page:
https://powercompare.co.uk/contracts-for-difference/
I can’t find what all this means for the homeowner or business.
This one comes close:
https://www.canstarblue.com.au/electricity/electricity-costs-kwh/
My situation is an all-electric free standing rural house and a couple of sheds. (I do have a modern wood stove for emergency heating.)
The type of service is labeled ‘1004’ – Residential – 1 Phase, 120/240 Volt, 320 Amp and smaller.
The rate is $25.50 facility charge (fixed per month) and $0.0982 per kwh for “energy delivered”. The minimum charge per month is $30.50.
These charges are set every fall by the local Public Utility District (PUD) after the regional Bonneville Power Administration (BPA) [See the Wiki entry] sets the next year’s rate schedule. This is for the year and does not change. That’s explained here:
https://www.kittitaspud.com/157/Rates
Here is a chart of the BPA load and generating sources (scroll down). The chart updates in 5-minute intervals.
https://transmission.bpa.gov/Business/Operations/Wind/baltwg.aspx
10
So you are paying 14¢ (Australian) per kWh of electricity. Watch out for a rush of Australian wanting to migrate to your neck of the woods, as most are paying double that except in South Australia when, thanks to lots of renewables ( The Cheapest Source of Electricity™ ) it is almost 3 times.
30
Yes. CFDs are an additional insurance cost on top of all other costs, it only increases the cost in total.
00
I was websurfing household power costs yesterday and found a few good info sites.
Some good comparative data and information on saving money for those interested.
The cost of showering:
https://www.showertimer.com.au/cost-savings/
Hot water calculator:
https://www.ausgrid.com.au/Your-energy-use/Energy-use-calculators/Hot-water-calculators
Or:
https://www.sustainability.vic.gov.au/energy-efficiency-and-reducing-emissions/save-energy-in-the-home/water-heating/calculate-water-heating-running-costs
Small appliance calculator:
https://www.ausgrid.com.au/your-energy-use/energy-use-calculators/small-appliance-calculators
The running costs of household appliances:
https://mozo.com.au/energy/guides/running-costs-of-your-household-appliances-how-much-are-you-in-for
Australian Household Debt Statistics to Be Aware of in 2022
https://takeatumble.com.au/insights/finance/australian-household-debt/
Hope this helps those that need it. 😊
80
We could have built 2 coal-fired power stations and still had enough money left over to buy all the carbon credits we needed to offset any emissions and save the planet.
Think about that.
That is how stupid the scam (and our government) really is.
140
Here’s an interesting comparison of countries’ energy use per capita over time.
Aussies are always belted for being energy hogs but Canada actually uses 1.6 times more energy per person than Aussies.
I hope this link works, but I’m not having much luck linking to some OWI DATA info.
Important that this is not just electricity, but other heating, transport etc. And USA also more energy than Aussies as well.
https://ourworldindata.org/grapher/per-capita-energy-use?tab=chart&country=RUS~AUS~CHN~USA~OWID_WRL~European+Union+%2827%29~CAN~GBR~NLD~CHE~SWE~JPN
11
So why are Canadians treated like saints and why do Aussies always get a kick in the guts?
BTW you’ll note that Sweden also uses about the same energy per person as Aussies, but cop no abuse, just like Canada. Why are Aussies such terrible people?
50
The big boys – AGL, Origin, Energy Australia, Alinta and others – all own actual coal generating assets. Their cost of production has not risen much so far, nor has the price charged to electricity customers per kWh. NEM spot prices are nominal data points and do not necessarily correlate with real cash flows.
50
See my reply to Gerard above. But also a couple of coal plants were in danger of running out of coal. Supplies were limited by flooding issues. So the generators were keeping in mind the opportunity cost of bidding too low, being engaged, and then running out of coal entirely for peak times. Since they were losing money with limited coal supplies, it would seem logical to save the coal for peak times, so it got “revalued”.
But yes, I’m guessing the AGL, Origin and Energy Australia are pretty happy with high prices.
And retail prices have started to rise. So maybe “spent” is the wrong word. How to convey a price signal spread from spot through forward and then retail deals?
80
Joanne alludes to this with her comment, and it’s something that not a lot of people realise.
Let’s just pretend you own Bayswater power plant and Macarthur wind plant.
At the evening Peak, umm, the same time every single day of every single year.
Power consumption reaches its high point for the day, so, it’s all hands on deck.
If it can be done, Bayswater might be able to run all four units, so 660MW X 4 so 2640MW. For that one hour of the evening Peak, that’s 2640MWH for that Peak hour (6PM to 7PM) and multiply that by the asking price at that time, so last night that cost during that Peak was (around) $500/MWH, so Bayswater would have grossed $1.32 MILLION for that ONE HOUR, if all four Units were online.
Now that same owner also got the same price for all the power generated by the Macarthur wind plant, and last night, for that peak one hour period, Macarthur with its Nameplate of 420MW delivered to the grid, umm, sorry, the wind wasn’t operating, so the total output for that hour was zero, so zip for that. Let’s pretend it was the average for Macarthur (24% CF currently) so 100MWH for the hour and a gross income of $50,000. So Bayswater would have made 26 times what Macarthur would have.
The point I’m trying to make here, is that coal fired power generates huge amounts of power when compared to those wind plants, so the income from the coal fired plant is humungous when compared to what can be delivered by wind power, and solar power, oh, wait a minute, all solar is back at zero anyway at that time.
So, if you do own a coal fired plant generating huge amounts of money, then you’d sort of hope in you wild dreams that the cost at that time might be high, eh!
Umm, as it always is highest at that time, and,umm, as there’s an absolute market for lots of delivered power.
Huge power, huge money, small power, chump change.
Now why would anyone even think about manipulating the market eh!
Once upon a time, when it was all coal fired power, there was no point in even thinking about that, and and and, that Peak was covered oh so easily, every single night. Now, if we could just get the wind to blow on demand during that Peak.
Tony.
100
“if we could just get the wind to blow on demand during that Peak.”
I’m assuming when Climate Change is stopped, the wind will blow appropriately.
And just the right amount of Sun.
Along with the right of amount flooding, drought, cyclones, tornadoes, and snow.
(Is anyone keeping an eye on Haboobs? Stop it, I’m talking about the desert dust storms.)
Now earthquakes, there’s a problem.
Stop Plate Tectonics.
And volcanos, what’s a molten planetary core good for anyway?
Afterwards we end Asteroid Supremacy.
Then we will earn our invitation into the Enlightened Non-Binary Federation of Planets.
Until then we must live short and not prosper.
60
Didn’t they already write that song for Camelot?
10
At the end of the day, electricity costs for the consumer keep rising. The ‘Pollies’ and Climate ‘egg spurts’ say that more Renewables will reduce those costs. So when ask the consumers? And in whose lifetime?
20
Just how much of an emergency is the climate emergency to actual American voters?
Read on.
With the 2022 midterm elections less than four months away, a New York Times/Siena College poll revealed that just 1 percent of registered voters viewed climate change as a “top priority,” let alone the most important issue facing the nation. The poll placed climate change far behind concerns about inflation, the economy, record crime rates, and the humanitarian crisis on America’s southern border. Even among voters younger than 30 — the demographic that is typically most energized by debates about environmental policy — the corresponding figure was a mere 3 percent.
70
AD – Bold – No more than usual as it helps my colour blind/deficient eyes see better
00
PS until someone mentioned thumbs up/down were green/red I was surprised, thought they were same colour – still think so – I cannot see link if not bolded. only realise if mouse moves over text
00
AEMO Disclaimer:
Important notice
Purpose
AEMO has prepared this report to provide energy market participants and governments with information on the market dynamics, trends and outcomes during Q2 2022 (1 April to 30 June 2022). This quarterly report compares results for the quarter against other recent quarters, focusing on Q1 2022 and Q2 2021.
Disclaimer
This document or the information in it may be subsequently updated or amended. This document does not constitute legal, market or business advice, and should not be relied on as a substitute for obtaining detailed advice about:
• past, current or future market conditions, prices and outcomes; and
• the National Electricity Law, the National Electricity Rules, the Wholesale Electricity Market Rules, the National Gas Law, the National Gas Rules, the Gas Services Information Regulations or any other applicable laws, procedures or policies.
While AEMO has made reasonable efforts to ensure the quality of the information in this document, it cannot guarantee its accuracy or completeness.
Accordingly, to the maximum extent permitted by law, AEMO and its officers, employees and consultants involved in the preparation of this document:
• make no representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of the information in this document; and
• are not liable (whether by reason of negligence or otherwise) for any statements or representations in this document, or any omissions from it, or for any use or reliance on the information in it.
Just as well. One of the “key factors” missing in the Executive Summary is the poor performance of RE (wind, solar) during the reporting period, despite it being mentioned by AEMO’s CEO on June 15, when AEMO announced it was suspending the NEM wholesale market.
50
From page 27 of AGL’s – Australia’s largest electricity provider – 2021 Annual Report:-
” We remain committed to not extending the technical life of our coal-fired power plants and have made a strong commitment to driving the decarbonization of the energy sector and the continued investment in new renewable and near-zero emissions technologies. ”
From the horse’s mouth.
80
And what will they say when the word gets out that carbon dioxide wasn’t harmful after all.
00
AGL had ” green compliance costs ” of $655 million in 2021. By comparison its total cost of fuel (mostly coal and some gas) to generate the $6.9 billion of electricity it sold in 2021 was $857 million.
AGL’s accounting seems horrendously overcomplicated. Maybe it’s a function of the market it’s in. Or the CFO is a fan of Kafka.
40
Jo, sadly it may be time to change your banner:
A perfectly good civilization
is going[has gone] to waste…60
China must be laughing at our indoctrinated morons passing themselves off as business leaders. Coles is another example… I puke every time I see their zero emissions ad. Pathetic.
20
Where’s Nick on this? Shouldn’t he be citing all the benefits to offset the price increases?/sarc 😉
00
I censor myself all the time even on this blog. I’d stand for local council but I know I’d say something wildly unacceptable to the censor friendly masses. If kids are around I censor myself completely. Modern kids are like the gestapo. I personally know someone who got reported to Docs for racism (listening to Milo videos) and they followed it up. IF you talk about climate change they get very angry and disturbed
and parents get angry at you for bringing up the topic. Censorship and self censorship is a part of modern life, it’s everywhere.
30
sorry, wrong topic.
20
Correction: socialist labor, greens and lnp logic.
The lnp were in power for two terms. What did they do to reverse the insanity? They too have similar ‘renewable’ targets to the other imbeciles – all sevants of the wef. The nationals (party of the country supposedly) ditched their leader so they could better target suburban seats on climate change issues. Clownworld.
30
“It was a phase change”.
Indeed it was.
Marked by the closure of one 500mw generator at Liddell.
What, then, when the other three generators close by next year?
00
[…] energy prices are already a train-wreck, but Super-Albo is here to take that failure and double it. […]
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