Three things are certain in life: death, taxes and Gotti panic:
All businesses and households in Victoria, NSW and South Australia need to seriously consider investing substantial sums in diesel generators, batteries or other sources of emergency power. Banks need to be ready to fund the massive investment required during the next nine months.
It is now absolutely clear that each of the state governments have not invested in sufficient emergency power to back their wind and solar installations and now have a network of wires that is unsuitable for the power generation grid they have established.
And the Commonwealth promises a partial solution in two or three years via the Snowy but has washed its hands of the looming disaster next summer.
…Following my series, The Australian Energy Market Operator took the unprecedented step of announcing that Victoria faced an incredible 72 days of blackouts and power shortages if Hazelwood was shut this week (April 1).
If the energy market is following Gotti’s advice then that would explain a few things! Snowy will be ready in 7-9 years and is not a solution. Nor is it the state government’s fault. Everyone agreed that we would transition from coal to gas base load power as decarbonisation proceeded. We’re well positioned for that with oodles of gas capacity. The critical change is the gas price spike driven by excessive exports that is idling the abundant spare capacity in the network.
Getting political won’t help anyone, Gotti, just reserve a little gas and all of the problems will be solved. Nick Xenophon is onto it:
“I support action. My concern is that this is the government stalling yet again when it knows what it needs to do,” Senator Xenophon said.
“The fact is we cannot wait another 12 months for recommendations to be made when we know what needs to be done. We need to have a public interest test in our gas supplies, we need to have tougher competition laws in terms of behaviour where it seems to be a case where we don’t have a competitive market. We need to put the squeeze on the power companies that seem to be making extraordinary profits, we need to reform the energy market rules so that we have a much more efficient and consumer-friendly system operating.
“There are businesses that will hit the wall in the next 12 months while the ACCC is looking at this issue because of energy prices.”
And Woodside is on board with reservation:
“We have one in WA and we operate quite comfortably with it, and I have one everywhere in the world where I operate,” he said.
“The reason is that there is a social licence to operate and there needs to be common understanding that the resource is owned by the people and they need to be convinced through the life of the project that they are continuing to benefit from the development of the resource.”
…Mr Coleman said open access to pipelines could bring down gas prices. “It actually costs about three times more to pipe gas from Queensland to Victoria than it does for me to ship it from the North West Shelf to Sydney,” he said.
…“The pub test is whether it makes sense that I can put it in a ship and send it around for roughly a third of the price it costs me to put it in a pipe — it probably doesn’t pass.”
Good job. Ban third party exports, install reservation, add “use it or lose it” rules. Problem solved.
