A lost Albo returned from his holiday last week to ask his bureaucrats to cook up new policies for cost of living relief.
Clearly, it is beyond the PM to calculate 1+1=2 by cutting immigration to take pressure off rents and to use regulation to push power prices lower.
These two price surges alone comprise nearly half of Australian inflation. They are the standout cause of Australian inflation.
Albo’s previous attempts to lower energy bills on the east coast cartel have not yet worked.
The spot gas price that determines electricity prices is still glued to Albo’s $12Gj ceiling for contract prices. It should be half this if local extraction prices were setting the price. But Albo has created a tractor beam to keep it high:
The first thing Albo should do is cut his gas ceiling price in half and apply it to the spot market.
Second, if he wants to reduce inflation at the source, he must ensure that the AER passes on the full wholesale electricity price falls of the past year into retail bills:
The quarterly moving average price in Dec ’22 QTR was $260 Mw/h.
The quarterly moving average price in Dec ’23 QTR was down 77% to $60 Mw/h.
This comprises 30% of power retailers’ input costs.
It must be all passed on in an AER default price offer that is smashed lower from July 2024.
Albo’s idiots should be all over the AER right now as it mulls what to do for 2024 like the power retailers are, but he is astonishingly slow-moving.
But why wouldn’t he be? More broadly, Labor appears entirely lost on energy:
NSW Energy Minister Penny Sharpe says NSW will not need Chris Bowen’s behemoth capacity investment scheme to shore up the state’s use of gas, which will continue to play a critical role firming up a grid increasingly dependent on intermittent renewables.
“The whole focus on looking at alternatives and biofuels like hydrogen is really important, and it’s all coming along … but you can turn on and off a peaking gas station in a much easier way,” Ms Sharpe told The Australian Financial Review.
“Batteries will do some of the [firming] work and once we’ve got longer duration [storage] through pumped hydro, they will [also] do some of the work. But there is a role for gas and I don’t feel the need to be defensive about it.”
The CIS should exclude gas. Not because doing so is particularly beneficial for climate change but because it will help lower energy bills.
How can any east gas minister chirp about gas without discussing market structure? The gas export cartel is the sole problem for the energy transition. It has left NSW without enough gas, driven power bills mad and war-profiteered the economy to a standstill.
It is the number one inflation issue for businesses and households yet Labor ministers are still busy defending the source of everybody’s pain.
Australia is not an energy superpower.
It is an energy super idiot.
