Loony Right unites as Insufferable Left falls silent

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Finally an issue that can bring together the rabble that is Australia’s Right wing political economy. They all hate climate change and energy transformation. The Australian loves the lie:

Malcolm Turnbull has blasted Labor’s renewable energy “horror show” by seizing on blackouts in South Australia to warn of out­ages across the country under the “insanity” of Bill Shorten’s 50 per cent renewables target.

As the energy crisis dominated parliamentary debate, the national energy market operator ordered a mothballed Adelaide gas-fired power station to fire up to increase supply and prevent further outages.

As Canberra residents were urged to restrict electricity use today by limiting cooking and avoiding using home appliances such as dishwashers, the Prime Minister warned that the blackouts could be repeated in other states under Labor’s policy for a national rollout of the failed renewable energy “experiment” in South Australia.

Wind power generation collapsed in the state on Wednesday night and deliberate load shedding was used to reduce demand.

The Herald Sun adores the lie:

On The Bolt Report on Sky at 7pm: More blackouts in South Australia thanks to its wind farms. Will this finally wake Australia from this insanity of renewable energy? My guest: Resources Minister Josh Frydenberg. Plus Rowan Dean on a telling poster for an Islamic conference. Also: Janet Albrechtsen and Bruce Hawker.

Meanwhile, media on the Left mindlessly reproduces the lie:

A newly aggressive Malcolm Turnbull has accused Labor of being “drunk on left ideology” as he blamed the rush to renewables for another serious blackout in South Australia, while defending his own emphasis on gas and coal-fired generation.

Other Lefties, as usual, were outraged at form over function:

Scott Morrison, came to question time with a lump of coal on Thursday,” and have that sentence seem anything other than the ravings of a psychedelic trip, so let’s just say it and be done with it.

Scott Morrison brought coal into the House of Representatives. A nice big hunk of black coal, kindly supplied by the Minerals Council of Australia.

“This is coal,” the treasurer said triumphantly, brandishing the trophy as if he’d just stumbled across an exotic species previously thought to be extinct.

“Don’t be afraid,” he said, soothingly, “don’t be scared.”

No one was afraid, or scared. People were just confused. What was this fresh idiocy?

Presumably because Donald Trump was not involved, no cultural identity was offended and property prices are safe from it so it’s OK. And that’s it. Here’s what actually happened which the Left media might investigate:

There is a lot of confusion and an unconscionable amount of politics swirling around the east coast power crisis today so I’ve tapped my sources to get some facts straight. Here’s what happened in SA:

  • the heat wave rolling across the east is testing the grid in every state;
  • NSW will be threatened today, coal power-powered QLD has been having brownouts this summer in similar conditions;
  • the associated demand surge in SA led to the Australian Energy Market Operator (AEMO), the regulator of the National Energy Market Operator (NEM), detecting a 3% power shortfall;
  • prices in the wholesale market rocketed from their usual $70MWH to $14kMWH;
  • SA’s Pelican Point gas generator, owned by French giant Engie, was running at half capacity but because the shortfall in power was small, it made a lot more money by not ramping up output than by doing so;
  • to fill the deficit, rather than order Engie to ramp output, AEMO ordered the power distributor, South Australia Power Networks (SAPN) owned by HK business magnate Li Ka-shing, to cut power to 40k homes;
  • it is unclear how these 40k homes were chosen;
  • this is why the SA government is so pissed off. The National Energy Market (NEM) failed and it’s unclear why the regulator allowed it.

Thus the questions that need to be asked today are:

  • why did AEMO prefer to cut than ramp gas power? Did it not have the authority to order Engie to boost output or did it make a mistake?
  • why did Engie have sufficient market power to not ramp output?
  • what structural changes need to be made to the NEM and AEMO so that it does not happen again?.

As you can see, these questions do not have a whole hell of a lot to do with the inherent reliability or otherwise of renewable power nor any shortfall in base load power. For that matter, in this moment of crisis they do not have much to with price of gas, either.

The pressing questions are about market structure, the NEM and functionality of the AEMO as the power mix shifts.

With both Right and Left at near collapse, we can expect much more of this totally fake world.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.