What a horrible mix of toxic politics, empty suits, ruthless rent-seekers and policy failure the east coast energy market has become. And now it is playing out in real time. From The Australian politics blog:
South Australian Energy Minister Tom Koutsantonis says the state government will make a dramatic intervention into the state’s energy market following a another blackout which left more than 40,000 homes across Adelaide in the dark.
Mr Koutsantonis told ABC radio the blackout was the “straw that broke the camel’s back” and argued that the government would be moving to retake greater control of the energy market in South Australia.
“The Premier and I have come to the conclusion now that the South Australian people expect us to retake control of our own destiny. We are going to be intervening in the market. From this day forward, we are not going to allow market forces and people who use the electricity market for profiteering to set our own future.”
“We are going to intervene and we are going to intervene dramatically.”
Mr Koutsantonis said he would not allow market operators to steam-roll the state rather than turning on power generation “that is already here.” He has argued that 3000MW of thermal generation remained idle in the state due to low availability of gas and higher prices.
“South Australia have reached the point where we all realise that electricity is a public good, it is a public necessity. It is in the hands of private operators. And as far as South Australians are concerned, this is an unacceptable outcome. And we need to take control of our electricity market.”
“We are working on a number of issues to try and regain control,” he said. “We have to intervene now. Last night was the straw that broke the camel’s back.”
Here’s the gas price, now trading at a nose bleed average price of $10.08Gj in the short term market, up from a historical average of $3Gj:
Currency adjusted, we are almost paying the same amount as Japan for our own gas. So much for export net back pricing! The problem is the east cartel will not sell the gas locally. Why would it when it controls the market? SA is mulling desperate measures:
SA Premier Jay Weatherrill has flagged that the state government was planning to intervene in the energy market.
Mr Weatherill said SA was now on its own when it came to the national electricity market.
He accused Mr Turnbull and his government of spending the week ridiculing the state rather than offering to be part of a solution.
“What that means here is that we have to step up and take control of our own future,” he told reporters in Adelaide.
Some of the measures would be dramatic, including one option to completely nationalise the system, he added.
Mr Weatherill blamed the national energy market for the outages, pointing to the fact an available gas-powered generation plant wasn’t made to come online. “The rules of the energy market are broken,” he said in a Facebook video session shortly after the blackout.
Mr Turnbull has seized on the latest blackout in South Australia, saying the state Labor government had presided over the “most expensive and least reliable electricity” in Australia.
“Of course, they want to blame it on everybody else. Well I suppose they could blame it on the wind because it wasn’t blowing yesterday,” the Prime Minister said.
“This is an issue about competence. We stand for efficient, objective management of energy. The Labor Party, driven by ideology is putting Australia households and businesses at risk.”
Mr Turnbull also took aim at the fifty per cent renewables target adopted by the West Australian Labor Party, accusing it of being “drunk on Left ideology on energy.”
“They are putting Australians’ livelihoods, their businesses and households at risk.
It was your party that killed the carbon price, Malcolm. It was you who failed to co-ordinate state decarbonisation efforts. It was you that failed to address the gas shortage. It is you that is proposing to build coal power stations that will only entrench the power costs at these levels to fix all of your other failures.
A national leader of substance would at this point be convening state Premiers and other stakeholders to begin aiding SA in installing energy storage and reserving sufficient gas for east coast markets. That’s the answer, not howling like a mangy dog at the moon.
