Electricity and Gas Articles:  

Energy: Addicted to Waffle and Disaster

Quadrant Online, 18 July 2018

Over the past year, we have seen the misnamed report into “energy security” by Chief Scientist Finkel, the ACCC’s report (“restoring electricity affordability”) — and now a new annual report by market operator AEMO. These are in addition to a couple of dozen reviews into specific market-machinery matters and the regular reports from Code administrator AEMC, price and informational regulator AER, and AEMO. All these outputs derive from resources poured into government management of a sector to

Green Snouts Sniff a COVID Windfal

Quadrant Online, 16 April 2020

The Pope, deprived of the counsel of Cardinal Pell, the Church’s most astute voice, foolishly called coronavirus “nature’s response” for failures to act on climate change. It was, therefore, hardly surprising that coronavirus would be recruited to push for additional renewable energy subsidies to reinforce those that have already created today’s high cost, low quality electricity.

Revealed: the Deep Green State

The Spectator, 24 March 2020

A story in the Guardian demonstrates the impotence of government against the Deep State machinery that it nominally controls. This involved an attempt, in line with government policy, to divert money from the Emissions Reduction Fund to less harmful activities than efficiency-undermining promotion of green energy that it normally funds. The case under review was an attempt by Delta Energy to get some $14 million support for refurbishing its Vales Point plant, an outcome that would extend the pla

Danandrewstan: two steps forwards, one step back as energy security matters more than ever

The Spectator, 18 March 2020

The latest energy policy from the Victorian government is to place a constitutional ban on fracking and coal seam gas exploration but once again permit the search for conventional gas in the state. The proposed policy was developed in consultation with an industry/activist Independent Stakeholder Advisory Panel. The panel was chaired by the Lead Scientist, Amanda Caples, a pharmacologist, who was previously responsible for developing the state’s “strategic industry growth plans”. In announci

Renewables rent-seekers aren’t interested in bushfire prevention – or cheap efficient energy

Spectator Australia, 20 January 2020

No amount of mouth-frothing by Piers Morgan or artful deception by the legions of renewable energy warriors published by the Australian Financial Review and the Guardian will change the facts about this summer. The severe fire season is due to dry weather (not itself conceivably a result of climate change – rainfall trends have been flat for the past century) and the accumulation of combustible material on the forests’ floors. The build-up of combustible material is a result of the criminal neg

Time to Bight the bullet over gas scare campaign

By Jeremy Barlow, The Australian, 8 January 2020

The NSW government is considering approving the establishment of a liquefied natural gas import facility moored off Port Kembla. This same government has erected formidable barriers to domestic gas production. Gas imports to Australia were last considered 20 years ago. The source was to be Papua New Guinean gas, to be sent here via sub-sea pipeline, then distributed — again by pipeline — to Queensland and NSW. The then federal government liked the idea as a way of providing aid to PNG.

Cheaper power coming? Blink and you’ll miss it if our Paris goals remain

Spectator Australia, 11 December 2019

There is a panoply of agencies regulating energy at the Commonwealth level and not all of these seem to be rowing in the same direction. The main agencies are • The Energy and Environment Department with 490 staff in energy and greenhouse — plus another 454 in its dependent agencies: Clean Energy Finance Corporation, the Clean Energy Regulator and the Climate Change Authority; • The Australian Energy Regulator (AER) with 283 staff; • The Australian Energy Market Commission (AEMC) with 95 sta

Eectricity supply continues is dismal march

Catallaxy Files, 11 December 2019

I have a piece in the Spectator today that draws together some recent developments in energy policy being developed in the half dozen or so agencies that control what is ostensibly, and was in earlier days, a market with supply largely from private enterprise. I also did a session on the issue with Chris Kenny. ​ The destruction of the once highly efficient electricity supply industry by government and bureaucratic oversight is, of course, well known. This, the most vital Australian industry

Days of power and fury: January 2019 electricity prices and outages

Catallaxy Files, 3 January 2019

Compared with a National Market that had a turnover of less than $7.5 billion a year four years ago, the turnover in just two days in January was over $1 billion. It is impossible without all data on contracts to determine who the electricity industry’s winners and losers were from the January 2019 high priced events. With the electricity there are multiple markets but it is best to think of them comprising just two markets. The first is the spot market which we see every five minutes; the pr

Reaping the fruits of political sabotage of the electricity industry

Catallaxy Files, 25 January 2019

The third world nature of Australia’s electricity industry was revealed this week with wholesale prices in Victoria and South Australia at the maximum $14,500 for lengthy periods in spite of thousands of customers being cut-off, major users agreeing to shut down demand in return for compensation paid by consumers, and even some oil plants being called in. The causes are clear. For twenty years, Australia has embarked upon a subsidy program for intermittent, unreliable and costly wind and sol

Banks pretend to be virtue signalling while plundering electricity consumers

Catallaxy Files, 21 January 2019

In the salad days prior to 2015, before governments’ destructive interventions undermined Australia’s stable low-cost electricity supply, electricity as a topic of general interest hardly figured. Any concerns about power blackouts just did not reach the front pages or the late-night news bulletins. At that time the National Market had about 50,000 megawatts (MW) of capacity, about 80 per cent of which was coal with gas and hydro providing the balance; with the exception of wind/solar, which ha

The Australian Energy Regulator’s wholesale electricity market performance report

Catallaxy Files, 9 January 2019

The more desperate the situation of an industry, the more reports and regulatory overseers’ governments require, blind to any recognition of an industry’s malaise being created by their own actions. And so, with electricity we have an alphabet soup of regulatory agencies analysing, advising and fiddling. At the Commonwealth level we have the ESB, AEMO, AEMC, AER and ACCC all seeking a place in the sun. On top of this are state regulatory agencies and conventional line departments. Then we ha

Ford’s Ontario has Nothing to Learn from Australia’s Climate Plan

The gilets jaunes (yellow vests) demonstrations across the Atlantic against climate change driven fuel taxes offer Premier Doug Ford yet another reason to congratulate himself on repealing Ontario’s carbon tax. Less reassuring however is the speculation that he is to introduce a measure similar to the Australian ‘Emissions Reduction Fund’ (ERF). A sop to the leftists within the Australian coalition conservative parties, this provides funding for a reverse auction where, instead of taxing all e

Labor’s energy deal: Shorten facts, but you’ll pay more

The Spectator, 21 November 2018

Sucked in by spurious claims of the loss of 99 per cent of all coral reefs, mounting natural disasters, a permanent drought in the Murray Darling, and illusions that fossil fuels are archaic, Labor is preparing to announce its energy policy. Earlier this week, in a dummy run, Energy spokesman Mark Butler claimed, in the context of apparent public support for renewables, that we can up the government’s 23 per cent renewable energy share, which

The Diabolic Policy Dilemmas Created by Previous Energy Policies

Catallaxy Files, 14 November 2018

Regulatory measures – subsidies for wind/solar – have wrecked the Australian market, driving up prices and increasing supply costs. And the policies have created wind and solar capacities that have on-going effects, which cannot be unwound by simply allowing the subsidies to run their course, since this will exact an increasing toll on energy costs. Countervailing subsidies to coal generation cannot solve the problem since, with existing policies in place, a subsidy to one or more coal generat

A Simple Rx for the Energy Mess

Quadrant Online, 23 August 2018

Power prices have ignited the current leadership crisis and there are few signs of sufficient understanding of what caused this in the political firmament or, for that matter, in the mainstream media. ​ Malcolm Turnbull engineered the now comatose National Energy Guarantee to disguise his ideological imperative of a planned energy system that is fundamentally based on those wind/solar/battery technologies he regards as the shape of things to come. He says: Our primary focus is to bring power

Will abandoning energy subsidies allow the electricity market to self-correct?

Catallaxy Files, 29 August 2108

Coordination of supply in network industries Network industries involve firms cooperating in order to meet customer demands. Their success depends upon parties mutually agreeing on certain interconnection standards in order to combine components together. This need for coordination was often ensured by keeping the major supply components in-house. ​

Turnbull’s new approach to electricity: smoke and mirrors

Catallaxy Files, 18 August 2018

The idiocy of Turnbull’s handling of electricity policy now, once again, looks likely to cost him the leadership of his party. Faced with termination, he is seeking to extricate himself while pretending to reform the policy that has revealed his incompetence. His new proposals at modifying the National Energy Guarantee (NEG) are bromides that leave intact his destructive objectives for the electricity supply industry. Turnbull’s automatic default position is to override the market and substit

Wind forces up electricity prices in direct and indirect ways

Catallaxy Files, 2 July 2018

Different generator types earn different average prices in electricity markets. Australia’s National Electricity Market can see prices at anywhere between $14,200 per MWh to -$1,000 per MWh in response to different demand and supply situations. The price variability provides incentives for suppliers to stand ready to take advantage of high price situations, thereby also evening out the actual price. The average price is now $80 per MWh, double the level that prevailed prior to the regulatory

Domestic gas shortage averted – not even nearly beneficial

Catallaxy Files, 23 June 2018

The Australian Energy Market Operator (AEMO) recently produced forecasts that gas availability would not be a constraint on electricity supply over the coming years, notwithstanding the tremendous increase in Liquefied Natural Gas (LNG) exports. AEMO projects the following picture.

NEG: Standing Fast on a Sinking Ship

Quadrant Online, 18 June 2018

The architects and current beneficiaries of Australia's addled energy policies won't admit it, but the Paris climate accord is disintegrating. The US has bailed, Canada grows wobbly and Japan opens coal-fired plants. Meanwhile, our leaders remain resolute -- resolutely blind, that is light bulb IIWith the National Energy Guarantee (NEG), Australia is locking itself into more and more intensive greenhouse gas emission restraints, when the Paris Convention that is the supposed framework for such

Energy policy, price escalation and the destruction industry competitiveness

Catallaxy Files, 8 June 2018

For some in Australia, the renewable rich UK electricity market is a beacon. ​ Wind produced 15 per cent of the UK’s electricity in 2017 and was running at 29 per cent earlier this year bringing Emma Pinchbeck, executive director of RenewableUK to opine, “The move to a smart, renewables-led energy system is well underway.” Greenpeace UK’s energy campaigner, Nina Schrank, added, “The plunging price of renewables is allowing low carbon energy to replace coal and gas”. The green soothsayers spa

The ALP’s emission reduction dreams will strangle the economy

Catallaxy Files, 23 November 2018

Over the past decade, we have spent $70 billion on wind and solar. Here are some statistics from BNEF, not uncoincidentally, the venue where Bill Shorten and Mark Butler yesterday launched an outline of the ALP energy and climate policy.

Wind forces up electricity prices in direct and indirect ways

Catallaxy Files, 2 July 2018

Different generator types earn different average prices in electricity markets. Australia’s National Electricity Market can see prices at anywhere between $14,200 per MWh to -$1,000 per MWh in response to different demand and supply situations. The price variability provides incentives for suppliers to stand ready to take advantage of high price situations, thereby also evening out the actual price. ​

Domestic gas shortage averted – not even nearly beneficial

Catallaxy Files, 23 June 2018

The Australian Energy Market Operator (AEMO) recently produced forecasts that gas availability would not be a constraint on electricity supply over the coming years, notwithstanding the tremendous increase in Liquefied Natural Gas (LNG) exports. AEMO projects the following picture.

Liddell is just part of a bigger battle

The Spectator Australia, 22 May 2018

Like a border skirmish that develops into a global conflagration, John Howard’s policy to require “two per cent additional energy” be met with renewables has escalated into a measure destroying the electricity market. Back in 1998, the idea sounded good: give renewables a leg-up while they march to their inevitable destination involving cost-competitively displacing fossil fuels in electricity supply. ​ In the interim, an immediate bonus would be that the subsidised renewables, being virtually

Turnbull’s chosen energy supremo says wind is cheaper than coal

Catallaxy Files, 5 May 2018

On Thursday, at the Energy Users Conference, the government’s chosen head of the chive quango running the electricity supply industry, Kerry Schott, remarked that coal plants could no longer compete. According to The Australian (her speech has not been made public) she said “you are unlikely to see a new coal-fired generation plant unless there is a change in technology and a decline in the price of coal”. Had she simply wandered off her politics-free advisory role and opined that, given the le

Energy Battlegrounds and Furphies

Catallaxy Files, 13 April 2018

I have this piece in this morning’s Australian which addresses the direction of energy and climate policy in light of Josh Frydenberg’s Press Club address. Aside from demonstrating how the renewable program has wrecked the electricity supply industry and brought a doubling of prices, it has two main themes. First, it demonstrates that government statements bend the truth in saying that the National Energy Guarantee (NEG) will be neutral between energy sources.

Energy policy takes center stage

Catallaxy files, 10 April 2018

The action is getting hotter on the energy front. Having been in a small minority for years, readers and writers on catallaxy are now finding themselves closer to the mainstream on the policy on energy/climate. To recap, the recent initial incendiaries were thrown by backbencher Craig Kelly in forming the Monash Forum and calling for the abandonment of the renewable energy subsidy policy which is destroying the competitive fibre of the economy. Unnerved by the whole process Mr Turnbull then m

Why some power bills are poles apart

Herald Sun, 30 March 2018

Electricity bills have doubled over the past three or four years. The main reasons are twofold. First, state and federal governments have required retailers to source increasing shares of the electricity supply from low reliability wind and solar, which receive subsidies from consumers hidden within their bills. These costs to consumers are amplified by the subsidised electricity forcing the closure of low cost and dependable power stations like Hazelwood and the South Australian Norther

Beware of propaganda organs extolling new electricity power

Catallaxy Files, 29 March 2018

hile the ACCC’s Rod Sims may have had a Damascene conversion when he noted that he would like to get the price of electricity down half a dozen years after the reason for the price surge became obvious (hint look at the forced growth of subsidised renewables). What he will do about it, short of reinforcing the cries on this blog to abandon regulation, is anybody’s guess. (Post script, the Australian Energy Regulator which is housed within the ACCC, having been in November 2016 asked to report o

Remedial Ed for Renewables Fans

Quadrant Online, 29 March 2018

The fall from grace of the Australian electricity industry has been breathtaking. At the turn of the century, Australia had perhaps the world’s lowest-cost, most competitive electricity industry. This rested on cheap, low-sulphur coal, which was responsible for 85% of generation, ample supplies of gas, and modest but useful hydro-electricity generation capacity. ​ Reform in the 1990s harnessed these assets to create a low cost, highly reliable system. The reforms included: a national electr

Emissions and the meeting of energy ministers

Catallaxy Files, 19 April 2018

Ben Potter, who as a useful idiot, was leaked a copy of the National Energy Guarantee (NEG) report by the Victorian Government, reports today that the states are likely to sign off on the NEG at their meeting tomorrow. Potter is excoriated by Terry McCrann in today’s Herald Sun for his pandering to green energy myths. NEG has twin features of reducing greenhouse gas emissions from the energy sector together with a measure that ensures wind supply has a firming contract to compensate for its inh

Australians suffer as big emitters get a greenhouse gas free pass

The Australian April 13, 2018

Environment and Energy Minister Josh Frydenberg’s tour de force at the National Press Club on Wednesday and his opinion piece on this page yesterday show a man on top of his brief and using it to smite the ALP and the Greens as well as those on his own side promoting direct investment to counter the continued damage being done by renewable energy subsidies. Renewable subsidies have caus

Can the backbench energy revolt steer us back low cost electricity?

Catallaxy Files, 4 April 2018

It all came so suddenly. ​ Over the Easter break a ginger group of Coalition backbenchers, the Monash Forum, was announced. Chaired by Craig Kelly, one of the few MPs who has really studied the economic disaster that greenhouse policies are causing, it counts at least 20 MPs as members including Tony Abbott, George Christensen, Eric Abetz and Kevin Andrews. ​ The forum’s manifesto states opposition to all subsidies and argues that no private company will now invest in coal given the risk th

Deregulate energy market and go back to coal

The Australian, 22 February 2018

The catastrophic outcome of government energy market interventions is palpably clear. As the latest new regulatory body, the Energy Security Board, diplomatically puts it: “Fifteen years of climate policy instability ... (have) left our energy system vulnerable to escalating prices while being both less reliable and secure.” ​ Australia has seen electricity prices double since 2015 and the once reliable supply is now suspect. From enjoying the world’s lowest cost electricity a decade ago, Aust

The Future of Energy

Address to the Future of Energy Symposium, Adelaide, 6 February 2018

The future is less certain than the past but even with the past there are varying views about what has happened and what drove the developments. We have seen the wholesale price for electricity rise from under $40 per MWh with very little trend up until 2012, and was still $40 in 2015, to its present level of around $90 per MWh Wind has risen from nothing in the early part of the century to a share of over 10 per cent today. All of that wind is dependent on subsidies currently around $85 per MWh

The Snowy scam, the Donald and death of Australian industry

The Spectator Australia, 6 March 2108

It seemed too good to be true: Snowy being bought by the Commonwealth from state governments in what appeared as a money creation process – the Commonwealth had no apparent increase in debt or other costs, while Victoria and New South Wales got $6 billion for their Snowy shares. The reason behind the acquisition was to simplify the political process whereby the Snowy 2.0 pump storage project is pursued. ​ The credibility of innovative balance sheet practices aside, what we also now have is a

Politicians have stacked the deck against cheap coal

Herald Sun, 2 February 2018

obody should believe what any Australian government minister tells them about energy. Influencing politicians are self-interested lobbyists, and voters who have fallen for green falsehoods that the coal fired power station that supply four fifths of our electricity are dirty and no longer needed. Many politicians have themselves drunk deeply from that Kool Aid. Their policies have led the nation into an abyss of high electricity and gas prices, with uncertain reliability. A few years ago Austral

Government induced power crisis averted, for now

Catallaxy Files, 21 January 2018

At 12 PM on 19 January the electricity market manager, AEMO, to its own and everybody’s great relief announced “VIC AND SA ENERGY SUPPLY REMAINS SECURE”. ​ It had been a knife edged couple of days with hot weather bringing high electricity demand (even though much of Australian industry remained on vacation). As often occurs on hot days, wind velocity was low and this, the fabled modern source of electricity, was feeding in less than half its capacity.

Renewable Energy: the mad saga continues

Catallaxy Files, 17 January 2018

Bloomberg New Energy Finance (BNEF) lobbies hard for renewable subsidies and estimates global “clean energy” investment at $333 billion. This excludes hydro-electricity other than Politically Correct “small hydro”. Some 85 per cent of expenditure is in wind or solar with the rest including biomass, electric vehicles and waste-to-energy.

The Snowy scam, the Donald and death of Australian industry

The Spectator Australia, 6 March 2018

It seemed too good to be true: Snowy being bought by the Commonwealth from state governments in what appeared as a money creation process – the Commonwealth had no apparent increase in debt or other costs, while Victoria and New South Wales got $6 billion for their Snowy shares. The reason behind the acquisition was to simplify the political process whereby the Snowy 2.0 pump storage project is pursued. The credibility of innovative balance sheet practices aside, what we also now have is a maj

Politicians have stacked the deck against cheap coal

Herald Sun, 2 February 2018

Nobody should believe what any Australian government minister tells them about energy. Influencing politicians are self-interested lobbyists, and voters who have fallen for green falsehoods that the coal fired power station that supply four fifths of our electricity are dirty and no longer needed. Many politicians have themselves drunk deeply from that Kool Aid. Their policies have led the nation into an abyss of high electricity and gas prices, with uncertain reliability. A few years ago Austra

Snowy 2: the policy of despair

Catallaxy Files, 10 January 2018

Snowy Mark 2 as a pump storage is designed to use cheap off peak power to pump water uphill to a reservoir so that it can be used at a later stage when electricity prices are high. It does not create any new energy – in fact it requires some 15 per cent of the available energy to be used up in the pumping process. Starting out with a $1.5-2 billion estimated cost when announced by Mr Turnbull in March of last year, a heavily redacted feasibility study has now put the cost at $3.8 to $4.5 billi

Government induced power crisis averted, for now

Catallaxy Files, 21 January 2018

At 12 PM on 19 January the electricity market manager, AEMO, to its own and everybody’s great relief announced “VIC AND SA ENERGY SUPPLY REMAINS SECURE”. It had been a knife edged couple of days with hot weather bringing high electricity demand (even though much of Australian industry remained on vacation). As often occurs on hot days, wind velocity was low and this, the fabled modern source of electricity, was feeding in less than half its capacity. On the spot market, prices reached $14,00

AGL: impoverishing the nation to boost its bottom line

The Spectator Australia, 14 December 2017

The supporters of renewable energy continue to claim – as they have for the past 30 years – that wind/solar is or soon will be cheaper than energy from coal generators. Even so, renewable energy supporters continue to lobby for ongoing subsidies, which today provide $85 per megawatt hour on top of the spot price of $80.

AGL’s proposed power station closure would ensure continued excessive electricity prices

Catallaxy Files, 10 December 2017

Yesterday AGL confirmed its plans to close the Liddell coal powered electricity generator in 2022. It did so in the face of calls from the government – even by notorious green aficionado Malcolm Turnbull – for its life to be extended. AGL epitomises the sort of firm that Warren Buffett invests in – that is a “business any fool can run, because someday a fool will”. It has previously been managed by a fellow fresh from running a Danish wind turbine manufacturer, Paul Anthony, w

Musk magic and the Tesla torment

Catallaxy Files, 2 December 2017

Bad luck for the much hyped Tesla battery when the grand opening in South Australia yesterday coincided with storms that brought power outages in its immediate vicinity. Designated as reliability-proofing a state that has seen the future of electricity generation more clearly than Lincoln Steffens saw how effectively the infant USSR would work , it was launched with the usual puffery of how it could power 30,000 homes for an hour in the event of a blackout. This leaves 737,267 South Australian

Queensland and Victoria seeking to feast off national economic amputation

Catallaxy Files, 1 December 2016

here are those who say if you force people to invest in horses and buggies and use these for half of their road trips we would all be better off. Not for them the superficiality that this would reduce real incomes as a result of investing in technology that is higher cost, prone to breakdown and can only operate when the horses are not resting, eating or carrying excessive weight.

Turnbull’s energy policy proposals: more steps forward than back?

The Spectator Australia, 22 November 2017

The Government has now received but not yet released a report into the energy market plans it wants to put in place. These plans entail retaining the increased availability of the Renewable Energy Target (RET) subsidies until 2020 and then maintaining payments of those to installed plant until 2030. Currently the subsidies, which are direct transfers from consumers, pay wind/solar $85 per MWh in addition to them receiving the spot price now at $80 per MWh (double the price prior to the Haze

Renewable Energy: the mad saga continues

Catallaxy Files, 17 January 2017

Bloomberg New Energy Finance (BNEF) lobbies hard for renewable subsidies and estimates global “clean energy” investment at $333 billion. This excludes hydro-electricity other than Politically Correct “small hydro”. Some 85 per cent of expenditure is in wind or solar with the rest including biomass, electric vehicles and waste-to-energy. In a press release of 16 January, BNEF includes the following graphic of Australian renewable investment trends.

Post-mortem of the Australian electricity Industry

Catallaxy Files, 20 November 2017

All thinking people actually know what has gone wrong in the Australian electricity industry: a doubling of wholesale market prices, diminished reliability, investment being policy – directed into fashionable but high cost avenues – wind, solar batteries, pumped storage. Unwilling or unable to accept this, like a car careering down the wrong side of a motorway, state and federal governments have set up inquiry after inquiry to provide insights and cheaper ways of forging the future they wish to

Is renewable energy competitive?

Catallaxy Files, 10 November 2017

Energy Minister Josh Frydenberg is now on his way to the UN conference in Bonn to pay obeisance to a global warming fraternity strengthened by two new members (Nicaragua and Syria) to the loss of merely one (the USA). Renewable energy (other than Politically Incorrect hydro) is the UN’s posterchild. Yesterday, two boilers from the last coal power station in South Australia were blown up. Apparently not in relation to the demolition, SA Premier Weatherill tweeted “coal is dead, long live renew

A Low-Wattage PM’s Useless ‘Guarantee’

Quadrant Online, 19 October 2017

The government's electricity "reforms" merely confirm the existing subsidy arrangements for renewable electricity, with consumers paying the renewable tax till 2030. Its "reliability guarantee" adds no greater certainty but will entail a vast new inflexible bureaucracy. The measures will not result in the forecast lower prices.

ACCC offers some clarity but much obfuscation in its report on electricity price rise

Catallaxy Files, 16 October 2017

The battle of the causes of Australia’s excessive electricity prices is well and truly on. Having moved from the world’s lowest cost electricity to among the highest cost in less than a decade, finally questions are being asked. The government commissioned the ACCC to provide advice on the elements bringing about the price increases and in a selectively released “draft” Rod Sims has said about seven per cent ($100) is due to renewables. A great chunk of the increase was blamed on ‘”strategic

Green, fickle and purely for political gain

Herald Sun, 14 October 2016

While Victoria retains a coal-based electricity supply, wind and solar provide 40 per cent of South Australia’s market. That’s the highest share in the world for a system that can import only about 15 per cent of its needs (in South Australia’s case from the maligned but dependable coal- based Victorian suppliers). Two weeks ago storms brought down South Australia’s electricity supply. Last week, Victoria saw similarstorms temporarily bring

Gas and electricity crises need deregulation not more interventions

Catallaxy Files, 27 September 2017

It is perhaps a little cruel to apply the epithet, “The best energy minister we have” to the likeable Josh Frydenberg, especially since he alone with Tony Abbott actually writes his own media pieces. In today’s AFR he writes about the unfolding gas crisis. While he cannot blame the Queensland government, where the ALP has followed the Coalition in permitting gas exploration, he blames the ALP under Gillard for permitting too many exports and the Andrews government for forbidding gas exploratio

ACCC offers no answers to government created energy crisis

Catallaxy Files, 21 September 2017

Appointed as head of the ACCC by Rudd Gillard, Rod Sims has a long association with the ALP going back to the Whitlam years. His re-appointment by the Coalition is unsurprising given the callow nature of conservatives and the fact that many have interventionist sympathies that accord with those of the leftist intelligentsia that Sims represents. In his speech to the Press Club Sims addresses two points that have been warmly embraced by like-minded people within the media.

Escaping the renewable energy subsidy trap

The Spectator Australia, 18 September 2017

An endgame is now underway in the renewable energy scam that has been responsible for destroying the nation’s electricity industry as a low-cost, efficient and self-managing sector. Though, in Churchillian terms, countering the debilitating effect of the self-imposed cancer is beyond the end of the beginning it has a long way to go before we have anything like the market we once had.

Andrews treads rocky power path

Herald Sun, 1 September 2017

Premier Dan Andrews is copying South Australia’s energy policy. The Premier aims to lift wind and solar’s share of the state’s electricity supply from its current 8 per cent to 40 per cent. Wind is unreliable and, in Australia costs three times as much as coal; solar is even more expensive.

Liberal, Green and ALP politicians conspire to destroy the economy

Catallaxy Files, 24 August 2017

Yesterday, Malcolm Turnbull, unveiling the plans by Pratt for new investment in containers said, “You know everything my government does is designed to encourage Australian businesses to invest.” The absurdity of this was underlined by Anthony Pratt informing us, “Our cost of energy in America is 2½ times lower than Australia.’’ One fifth the costs of the Pratt business’s production is energy and the facility is only possible by providing subsidies to the in-house production of this. Here is

How to turn cheap power back on

The Spectator Australia, 21 August 2017

Energy Minister Josh Frydenberg claims that renewable energy is a disruptive force in the energy market in the same way as the iPhone was to landlines and cameras. There is, however, a major difference: iPhones, like Uber, Kindle and eBay have disrupted previous commercial systems by force of technology. Renewables everywhere in the world have required government subsidies.

Weird times in the energy market

Catallaxy Files, 19 August 2017

AGL have announced a contract for electricity from the Queensland 453 MW Coopers Gap Wind Farm at an offtake price of less than $60/MWh (real) for an initial five years, with an apparent option to extend this at the same or a lower price for another five years. The suppliers are a consortium of the Future Fund, QIC and AGL (which retains 20 per cent ownership). AGL originally owned the project (which is to cost $850 million and is scheduled for completion in 2020) and had spent $22 million on i

AGL’s profits from coal likely to attract special taxes

Catallaxy Files, 10 August 2017

Just to prove that they are doing something to combat high electricity prices, the PM (and his energy Minister) called the major retailers to Canberra. Mr Turnbull offered the retailers the sharp end of his tongue, admonishing them for the high electricity prices. Mr Frydenberg nudged them along saying he was reluctant to regulate but unless they looked to reduce prices etc, etc. The firms promised to do more to advise customers of better offers and many of them said what was needed was a mov

Regulations create super profits in electricity supply – will Governments move to seize these?

Catallaxy Files, 21 July 2107

Environment and Energy Minister, Josh Frydenberg has assailed the Queensland government for presiding over (if not conspiring to produce) an outcome in the electricity market which has enriched the state government coffers by $1.5 billion (actually over four years). Following a reorganisation, the previous three generator portfolios, directly owned Queensland were collapsed into two. It is doubtful that the two businesses were actually formally coordinating their bidding (actions that are ille

Electricity: All Hope is Lost

Quadrant Online, 13 July 2017

Alan Finkel's otherworldly prognosis is bad enough. But toss in Malcolm Turnbull's advocacy of renewables and then add an imported American chief regulator who would have been happier working for Hillary Clinton ..... and where are you? The simple answer: thoroughly stuffed. ​ They are to examine the Finkel report into electricity. Among the many counter-productive recommendations this report offered was an increase in the electricity market’s “governance”. This is a demand for even more of th

Energy policy: Finkel Twinkle Little Star

Catallaxy Files, 9 June 2019

redictably, the Finkel report came out with a concealed attack on coal – a new tax which Finkel falsely described as “all carrot and no stick”. This is to cut in at a politically specified level of emissions with those power stations emitting more CO2 per unit of energy than this paying for credits and the subsidy going to the ones emitting less. Sounds like a carbon tax and it is one. The papers took their predictable stances, ones that totally disregard the facts that coal is easily the che

I see red when green blue prints cause blackouts

Herald Sun, 7 July 2017

The electricity market review by Alan Finkel, was to be the blueprint for a low cost, reliable electricity supply system that emitted less carbon dioxide. ​ Dr Finkel, like Mr Turnbull, has long promoted green energy agendas. Unsurprisingly his report was basically a carbon dioxide reduction plan, which disguised the costs and unreliability to the electricity supply system this entails. ​ Regulations currently force consumers to accept an ever growing share of subsidised renewable energy – large

Coal versus wind in electricity Investment

Catallaxy Files, 30 June 2017

Reliability issues aside, in the debate over the flawed Finkel report a vexed issue is that of costs of coal versus wind/large scale solar. Queensland’s Kogan Creek coal plant commissioned 10 years ago was offering long term baseload contracts at $38 per MWh. But the Australian Research Council had new coal at $80 per MWh

Can minor parties prevent energy policy crucifying the economy?

Catallaxy Files, 28 June 2016

Government is always a tension. On the one hand are those who want to produce things to meet consumer demand and to profit from this. And on the other hand there are those who want to prevent some forms of production that would disadvantage them and those who want to “redistribute” the income, often before it is produced. With energy policy however the main political rivals are in competition with policies designed to reduce national income and wealth. Shifting out of fossil fuel to wind/sol

Cheap wind power the latest furphy in support of suicidal energy policies

Catallaxy Files, 8 May 2017

Hot of the press, The Australian is breathlessly reporting that Origin Energy has contracted to buy wind energy at $60 per MWh, a price that is comparable with contracted prices from coal. The article sees this as evidence that the gap between wind and fossil fuelled electricity is closing. Just a moment’s hesitation would have made the journalist realise that something is wrong here. If the gap is closing why do we have the renewable energy subsidies and why are we bothering with not one but

The way out of energy crisis is reliable coal plants, not renewables

The Australian, 27 April 2107

AGL claims it has “a plan to get out of coal as smoothly as possible — embracing cleaner, more sustainable sources of energy like solar, wind and hydro”. This, it says, will be an “orderly” process beginning five years from now and finishing in 2050. Now that’s planning. While anxious to promote its green credentials, 90 per cent of AGL’s actual generation is fossil fuel based, mainly coal from Bayswater and Liddell in NSW, and Loy Yang A in Victoria.

Energy policy: no end to damaging political interference

Catallaxy Files, 19 April 2017

Prices at the Wallumbilla hub have risen from their former levels of $3 per gigajoule to $10 at present and in the peak summer periods were $16 plus; this was before the Hazelwood closure and there are reports of forward contracts at $20 per gigajoule. Prices in the US remain at about $A4 per gigajoule and the prospectivity of Australia for gas is, according to the US Energy Information Agency, similar to that of the US. In the light of state based restrictions on new development and federal a

A Dead Man Warns of a Dying Grid

Quadrant Online, 3 April 2017

Not long before his sudden and premature death, Australian Energy Market Operator chief Matt Zema spoke candidly at a private conference of power-industry executives. The enormous subsidies heaped on renewables, he said, mean one thing and only one thing: "The system must collapse"

How governments have destroyed the world’s most efficient energy market

Catallaxy Files, 28 March 2017

The nation’s energy policy is in the hands of ideological tyros. At the federal level Malcolm Turnbull is running the show with the equally green evangelist, his Departmental Secretary Martin Parkinson. At the state level, we have a Victorian Government desperately promoting wind, to match Greens policies in the hope of retaining threatened inner city seats, while also killing coal, conspiring with the Liberals to close down gas supplies and otherwise using the electricity supply system to pro

Time to pull the plug on destructive energy subsidies

16 March 2017

With its cheap coal, Australian electricity prices were previously among the world’s lowest but are now among the highest. Picture: David Caird ENERGY costs and reliability have deteriorated over the past 15 years. With its cheap coal, Australian electricity prices were previously among the world’s lowest but are now among the highest. This has been caused by intensifying government regulations, especially those mandating an increasing share of subsidised renewable energy.

Grasping at straws in the march to energy disaster

Catallaxy Files, 16 March 2017

As I pointed out in my previous post, republished here, the Australian government is using all its abundant intelligence resources to argue that Trump will not follow up on his strictures regarding the global warming scam. Julie Bishop is unfortunately proving herself to be simply a vacuous fashionista in saying that the US will stick to the Paris Agreement because “like Australia” it can easily meet its goals.

Cheap renewable energy is a costly myth

Herald Sun, 1 March 2017

Kane Thornton of the Clean Energy Council declared in these pages last week that renewable energy was the lowest cost energy available

Alan Moran: Follow Trump and abandon renewable energy targets

Herald Sun, 16 February 2017

Portland’s rescue however means upward pressures on other electricity users’ power prices and an even more precarious supply/demand balance next year. Wholesale prices have doubled over the past few years in South Australia, New South Wales and Queensland. Victoria will follow suit unless, as Terry McCrann advises, Hazelwood’s closure is averted. Electricity’s malaise is solely due to governments subsidising wind farms and rooftop installations. Energy retailers must include steadily increasing

Electricity: no end to the damage regulations are doing

Catallaxy Files, 16 Februayr 2017

There is no let up in the lies, ignorance and dissembling that passes for debate on Australian energy policy. Tanya Plibersek ventured onto the Bolt program and said, in line with green ideology, that the Renewable Energy Target means cheaper prices – a canard also voiced by the ABC insider duo of Lenore Taylor and Laura Tingle and central to the policy of the Victorian and other governments.

No answers blowin’ in the wind

Catallaxy Files, 11 February 2017

The Financial Review recognises that wind has broken Australia’s electricity system, and quotes Grattan advice that we need a new system, (redolent of Brecht’s channeling of East German politicians that it would be easier to dissolve the people and elect another). Entranced by the Chief Scientist’s pearls of wisdom the AFR also tells us that he is to seek the solutions in an upcoming trip to Ireland and Denmark. And they publicise the latest silver bullet, a new battery invented in South Austra

Victorian price electricity increases just a step to disaster

Catallaxy Files, 4 January 2017

Well who would have thought this possible? Substituting wind for coal prices is driving up the average Victorian’s electricity prices by $135 next year. After all this is occurring with increased wind that proponents never tire of telling us is set to become the cheapest form of new power. Greens and the wind rent-seekers have been doing that since 1990 and yet, in spite of all the regulatory costs imposed on coal, it is still only one third the price of the new white hope of civilisation and

Trump and Australian political dithering over energy costs

Catallaxy Files, 17 January 2017

What is wrong with these people? We have state leaders from South Australia, New South Wales and Queensland purposely rejecting the low cost energy option of coal that nature has provided and opting for renewables that will always cost three times as much. And we have an apparent consensus of politicians in Victoria, New South Wales and Tasmania rejecting fracking, the technology that has rescued US energy supplies and proven itself harmless in spite of a million wells having been drilled. Tod

Loon in, Turn on…Blackout

Quadrant Online, 10 February 2017

The first tragedy is that Australians, who not so long ago rejoiced in cheap and reliable electricity, now pay some of the world's highest prices. The second tragedy is that the same green fantasists, ideologues and rent-seekers are bent on making things far, far worse

Forced emission reductions entrench high electricity prices

Bad policy choices have seen our cost advantage become a thing of the past Major economic consequences are foreshadowed by several reports into the electricity industry that were presented to this month’s COAG meeting of energy ministers. Two of those reports addressed issues stemming from Australia’s ratification of the Paris Agreement on climate change. One of these, The future security of the national electricity market, was from a group chaired by the Prime Minister’s Chief Scientist,

High Electricity Prices are Here to Stay

The Australian, 21 December 2016

Bad policy choices have seen our cost advantage become a thing of the past Major economic consequences are foreshadowed by several reports into the electricity industry that were presented to this month’s COAG meeting of energy ministers. Two of those reports addressed issues stemming from Australia’s ratification of the Paris Agreement on climate change. One of these, The future security of the national electricity market, was from a group chaired by the Prime Minister’s Chief Scientist, Al

Hazelwood closure: politicians sabotaging the economy

Catallaxy Files, 04 November 2016

The political conspiracy to close down low cost power stations to combat the shibboleth of global warming claimed another scalp with the Hazelwood closure. Fossil fuelled energy faces discrimination at every turn vis-a-vis the renewable stuff that costs three times as much and is highly unreliable. Under the Commonwealth’s renewable energy laws, wind gets a hidden subsidy from the consumer which gives it $80-90 per megawatt hour whenever it can operate in addition to the $40 it earns on the market. The subsidy means wind will always run when it can and impose stop-start costs on the fossil fuel generators. In addition to Renerwable Energy Target subsidies wind an other renewables also get soft loans from the Clean Energy Bank and from other Commonwealth programs as well as a swag of subsidies that state governments engineer through their own “energy efficiency” schemes to promote wind and solar. And to rub salt in the wound, the Victorian state government upped its royalty tax on the brown coal stations by $80 million a year (meaning a $20 million a year hit to Hazelwood).

More green energy costs to placate activists and their financiers

27 October 2016

The trove of emails that Wikileaks is publishing help to explain what drives political decision taking. This is especially evident in the environmental sphere. US “charities” linked to Clinton campaign are funding lawfare and other opposition to Australian coal, oil and gas developments. International finance flows to influence policy on climate change also go from Australia to the US. Wikileaks reports an email to Hillary campaign chief John Podesta as “Here is the plan to go after WSJ and

Hazelwood closure: higher costs and lower reliability

The Spectator, 04 November 2016

A little over two decades ago, as the deputy secretary responsible for Victoria’s energy policy, I accompanied the then Coalition government minister to a Hazelwood visit. Although the plant personnel were solid Labor and opposed to the emerging policy of privatisation of the electricity supply industry, we were received with great cordiality. Apparently, the workers feared the ministerial visit to the plant – the first in the memory of the workers there – was to announce its closure and there was great relief once they learned no shutdown was planned. In the mid-1990s there were reasonable grounds to expect the plant’s closure. Built in 1964 it had not been performing well – unreliability meant it was available to run only 70 percent of the time (paradoxically, a level that is twice as high as that of modern wind farms). Its design life gave it only a further ten years to operate

South Australian blackout: it was, in fact, caused by the windfarms

Catallaxy Files, 21 October 2016

Though the wind-farmers’ propaganda machine regaled the media with fallen pylons as the cause of the South Australian 28 September blackout, the latest AEMO release refers to the pylon collapse as a cause of the State blackout only in a footnote. (“It is not yet clear whether those conditions potentially contributed to the line faults or whether the transmission towers collapsed after the Black System”). However available information (including to the Australian’s Graham Lloyd) is that this was irrelevant:

Requiem for a failed electricity system

Catallaxy Files, 6 October 2016

The trouble with wind South Australia has on average over 40 per cent of its internally generated electricity derived from wind. This is one of the highest levels in the world for a load with a relatively small interconnection with other sources (the two interconnectors with Victoria have a capacity to supply about 20 per cent of the state’s needs). Wind/solar generation has two features that are of concern. The first is that it is intrinsically high cost. As a mature technology, it will remain three times the cost of coal powered generation in Australia. It can only compete because it is subsidised by a regulatory charge on the consumer (thereby also not facing the same scrutiny if its support was through the Budget). It receives the subsidy whenever it runs, hence wind has an incentive to generate whenever it can, forcing established fossil fuel plant to be placed offline.

Government destruction of wealth: the saga continues with Victoria banning gas exploration

Catallaxy Files, 30 August 2016

Confirming Australia’s leadership in the world league of weak, over-reactive and stupid politicians, Victoria has announced it will convert into a total ban the existing moratorium on the production of gas coal seam gas, shale gas and tight gas using hydraulic fracturing (fracking) and other such methods. For good measure it is also banning exploration of conventional gas at least until 2020.

Fracking usless policy in Victoria

The Spectator Australia, 30 August 2016

The Andrews Government in Victoria has set in motion regulatory arrangements that will permanently prevent hydraulic fracturing (fracking) and other measures of tapping “unconventional” gas while maintaining in place an embargo of all other on-shore gas exploration until 2020.

Renewables an expensive rejection of cheap fuel and competitive advantage

Australian Financial Review, 29 July 2016

Exotic renewable energy from wind and solar costs three times as much as electricity from coal and gas generation plant. Renewables are subsidised by households and firms being required to include growing proportions of renewable energy in their electricity supply. The Renewable Energy Target (RET) in place requires 23 per cent of electricity to come from wind and solar by 2020. The renewable lobby estimates this is costing $40 billion for wind and large-scale solar installations. Unfortunately that expenditure is not beneficial investment. Rather, it is money spent on incendiaries to destroy existing productive fossil-fuel plant. And it is being unwittingly provided by electricity customers whose reward is higher prices due to subsidised renewable plant displacing low-cost coal and gas generators.

Energy and Environment an Unhappy Marriage

Herald Sun, 22 July 2016

Environmental programs, especially those targeting carbon dioxide emissions, have come to dominate energy supply policies over the past 20 years. Hence, following the federal election, energy and environment policy has been merged into one ministry under Josh Frydenberg. Last year in Paris, Australia like many other nations committed to reduce emissions of carbon dioxide by 26-28 per cent by 2030. Integral to this are policies to force the replacement of coal-generated electricity by renewable energy. Australia’s policies include lifting the current 6 per cent share electricity supplied by large scale renewables (mainly wind) to 14 per cent by 2020. In addition, there will be over 7 per cent in small scale (rooftop) generation