Wild Right rages at illusory renewables power shock

Via MB’s new best friend, Andrew Bolt:

Michael Lee of the Brighton Savoy sends me the quotes he’s got for his hotel’s electricity next year:

We are a family owned hotel currently in our 50th year of business.
Just a heads up of electricity prices for business at the coalface.
The Brighton Savoy has an electricity contract in place until 31st December 2017.
Attached is a quotation for 1,2 and 3 year electricity prices
A one year renewal would lead to an increase of $37,845.00 or an increase of 52.50%
A two year renewal would lead to an increase of $63,595.00 or an increase of 44.2%
A three renewal would lead to an increase of $85,796.00 or an increase of 39.3%
These increases are untenable and business is being hit from every angle.

What madness has possessed our politicians that they can do such harm in the name of global warming?

And the usual loon pond:

Australians will die because of high power bills driven by renewable energy, the chair of the Coalition’s climate committee is warning.

Liberal backbencher Craig Kelly believes some people cannot afford to heat their homes this winter.

“People will die,” he told ABC Radio on Thursday.

Mr Kelly cited recent reports that one-in-four Australian households this winter will be frightened to turn on the heater due to high power prices.

He also said the World Health Organisation has made it clear that winter mortality rates increase if people can’t afford to heat their homes.

I won’t deny that decarbonisation is playing a role given it is phasing out coal but it is not causing the power price spikes. It’s gas that sets the marginal price in the National Electricity Market owing to where it sits in the wholesale electricity market bid stack. See Australian Energy Market Operator description below:


It has been a rough consensus for fifteen years that Australia would undertake decarbonisation via the transitional fuel of gas as a bridge to renewables. However, the price of gas has launched 600% owing to Curtis Island exports and cartel discriminatory pricing and that has doomed the plan. It’s not renewables themselves which are quite cheap.

The only way to reduce power bills short term is to force the price of gas lower using draconian anti-monopoly regulation. Sadly the government has cocked that up by failing to install a gas reservation mechanism wide enough, deep enough and quickly enough to make any short term difference. The gas price is a national crisis, even the government declared it so, yet it has been treated in policy terms like a Sunday stroll.

Alas, we now appear destined to stumble into the worse case scenario. Demand destruction will be the key to adjustment ahead.

I just hope that we get some kind of effective cartel-busting mechanism operational in the medium term. Otherwise as local gas consumption falls the cartel will raise prices even further to offset volume losses.


  1. Ronin8317MEMBER

    It’s ironic that the best solution for their business right now is.. renewable via solar panels on their rooftop!!

      • If you own your own house and have enough solar you may be better off to stay on grid as feed-in tariffs have just doubled (in NSW anyway). To be subsidized by renters and those who otherwise can’t afford solar.

      • @Perindopril I hear ya brother / sister. I want to install solar but can’t until I can afford my own place… Nuts isn’t it?

      • You clearly have no idea what it requires to run a household off grid. Would really like to see you try. You would then understand that this moronic policy to turn off coal fired power is a VERY expensive exercise that will kill industry in Australia.

        At current cost of components and the best possible cost of funds the cost of electricity is 70c/kWh for off-grid renewable power. Try it and prove me wrong!

      • HadronCollision

        @ Dan

        I just the numbers on Enova Energy’s new 16c/kWh FIT vs their TOU tarrifs on last month’s bill. Also compared to Powershop.

        Unless you have a massive amount of panels (residential context) – let’s say 6kW at least – and a highly efficient home, the FIT is trifling.

        (Powershop’s FIT is 12.8c/kWH). Both FITs are up from 12c and 8c respectively.

        Whilst those jumps are large on percentage terms, retail rates have just jumped 20% in NSW, and, consider you use a LOT of power in peak/shoulder times especially in winter with young kids.

        What’s missing from really leveraging the PV asset is batteries.

      • ResearchtimeMEMBER

        The gas substitutional argument is delusional… there simply isn’t enough power to meet peak, which in SA’s case is after 4pm, when the sun starts to go down and everyone turns on their air conditioners.

        And this summer, you may see similar things happen in Victoria.

      • My current rental, like the previous rental, has enough rooftop solar to run the aircon during the Melbourne summer until about 6 o’clock. Unlike the previous rental, the insulation will keep the house cool for at least a few hours after the aircon is switched off. This summer, I might learn how the timer works, and switch the aircon on full bore at about 3 o’clock while I’m at work, ensuring the house stays cool without drawing from the grid nearly every day of summer.

    • Yeah have a look at it on Google Earth. Looks like quite a massive roof surface area and not a single solar panel.

    • Genius ! Try running an Aluminium Smelter with solar energy !

      I bet Canberra will finance it.

      • NZ successfully runs smelting off hydro, the alternative is new, small nuclear but its not the nuclear Abbott aka footnote likes tobeat hischest about.

        Lotta Loons on MB today. Just saying.

    • Plenty of roof space. Even flat. No shading issues. Can put in massive amount of PV panels. With storage and energy efficiency measures (heat pumps for water heating) they can massively reduce their energy cost. Probably enough to pay for the interest in bank loan on savings. Plenty of options these days on financing renewables on commercial premises. Be curious, be creative!

      • Lets see if you can do the math. Boyne smelter, just south of Gladstone, requires a steady power input of 900MW. Have a go at a scoping exercise to determine what sort of solar array would be required to supply the 900MW day and night every day of the year. Any outage over 5 hours causes cells to freeze that takes 12 months to recover from. A drop in power for a few minutes upsets the process that can take days to restabilise.

      • RickW, I don’t understand why we have to solve the power problems of Australia’s largest aluminium smelter.
        They are connected to the Qld grid but get 85% of their power from a local power station, at a very good price. They refused to sign a fixed-price contract, preferring to pay market price, yet complained, when the spot price soared, that they’d have to shed jobs. In other words, they tried to make it the State Gov’ts problem.
        Like all Al smelters they chase the best power price. They have a duty to shareholders, none to the state. Why should we care?

      • There was no problem until the reliable power supply system was used for a purpose never intended. Essentially it is a sink for non-dispatchable intermittent generators that has caused havoc with the system. The consequence is skyrocketing power prices.

        Why would Rio Tinto bother making aluminium when they can make more by selling the electricity previously used to make the aluminium.

        The exercise to scope a solar power supply to provide power to a 900MW smelter is to make the point how futile it would be. No more than a handful of individuals globally actually understand the challenge and stupidity of trying with currently available technology other than coal fired plant or hydro where the water resource is immense.

      • Why are you saying we have to a smelter off solar? Can’t we use alternatives instead?

  2. Ronin8317, The best solution is to knock over the Savoy and build apartments. It is in a really nice spot in Brighton. Why have a productive business that costs almost $100k just to turn the lights on.
    The owners kids can retire and post pics of themselves on Instagram with their toys on holidays.

    • kiwikarynMEMBER

      You wouldnt even need to knock it over, just turn the rooms into studio apartments.

      • And then rent them on Air B’n’B. The place would be just like a hotel…. oh…..

      • kiwikarynMEMBER

        Strata the room titles, then sell the rooms off, then charge the owners a fee for managing their AirBnB rentals. Charge extra for things like laundry service, concierge, and provisioning. Even better business than a hotel!

    • All good solutions, but you forgot to ask for a handout from the Government because their licence has been replaced with Air BnB . You know compensation like the cab drivers demanded because of Uber.. That’s a great solution for everyone!

      • You forgot the next step after that which is to complain about the size of the handout.
        I am puzzled as to why some of the Taxi plate holders don’t get why they don’t have public support.

  3. adelaide_economistMEMBER

    I wonder whether the end bit suggesting this is a deliberate outcome due to renewables is just someone who’s been sipping the east coast shock jock narrative or if they know better and are playing it up. Of all people, you’d think someone dependent on coastal tourism might be concerned about the environment. It’s scary if people are even now blaming (cheap) renewable energy for their surging power bills.

  4. Australia … Where it’s your right to screw everyone! Cartel or local Plumber … It’s the Australian way of life and the sheeple play along!

  5. “Australians will die”?

    Maybe due to the right wing policy of forcing the unemployed to go through drug testing.

    And replacing 200,000 Aussies per year with 457 visa staff.

    • Plenty living outside in Sydney now under bridges and in the CBD in tents. What about those poor souls? Oh yeah their homeless and irrelevant. Never mind the fact we got rid of public housing..

  6. kiwikarynMEMBER

    In NZ there is an retail electricity company that sells power based on the spot price. For the most part, this is quite economical. Except when a wintry blast comes through the country and power prices spikes to 124c per kw. I know people who are at home and too scared to turn the heating on, so are making do with blankets.

    • I guess you mean per kWh?

      This is where the Powerwall comes in handy, recharge it during the off peak and discharge it during the peak.

  7. turncoatMEMBER

    Gas is the major culprit but renewables can justifiably be blamed as well because:

    a) For the purposes of system security AEMO only recognises wind capacity as having a few percent of their nameplate rating as being reliable meaning that, ultimately, more than 90% of this capacity needs to have firm backup – or else AEMO would step in and purchase it separately using the reserve trader mechanisms available to it.

    b) wind power in particular is poorly located – often at the end of long windy peninsulas. Expensive transmission is required thereby increasing the cost on consumers,

    c) Renewable intermittency chews up thermal plant duration. So coal and gas plant get less run time. This is to be expected and no bad thing if the goal is to reduce emissions but it has a major impact on their operating costs because (i) they can no longer purchase cheap take or pay fuel contracts and must instead pay much high prices (ii) rail and pipeline cartage fees are often priced on capacity rather than volume and so despite purchasing much less coal or gas their fuel costs don’t fall by much (iii) other largely fixed costs need to be recovered from less hours (e.g. labour, insurance etc).

    All of this means that renewables success comes at the cost to thermals and thence to consumers. Finally there’s the cost of the RET itself. In itself it’s not so large – but its the driver of the other bad stuff described above. Cumulatively the effect is significant – and there really is no good reason to favour renewables over any other form of carbon mitigation.

    • Johannes Kepler

      Exactly and this is why the same problems are being faced around the world in countries which are decades ahead in renewables and Australia does not have the most expensive energy on earth.

      Oh – no – sorry – my mistake – everything you write is total bullshit.

      Carry on.

    • Hmmmmm, I see the loon pond here is desperately playing the “intermittency” card, desperate because batteries have pulled the rug out from under their fave excuse. Notice how they avoid and mention of the dreaded word and instead are using the play book tactic of repeating “intermittency” in the hope people will forget reality.

      Lotta loons on MB today. Just saying.

      • turncoatMEMBER

        Jeremy, calling everyone with a different view a loon might work for some. H&H gets a pass because he’s shone a much needed light on housing amongst other things, but the quality of your contribution is markedly poorer. Aping the great, doesn’t make the ape great.

    • It’s certainly renewable in my AO. Beans FTW. Lots of baked beans. And onions. Constant gas renewal is the result. 🙂

  8. Johannes Kepler

    Yes – the exact same energy crisis is facing every other energy producing nation on earth which is transitioning to renewables. And of course even worse conditions are facing all other countries which are transitioning to renewables and are not producers.

    One problem with your spurious shit – they all – and I mean all of them – have lower prices. Australia is the MOST expensive on earth. Many of them are taking in a million migrants a year, have no fossil fuel resources, and are shutting down fossil fuel energy plants.

    Pretty much EVERYTHING you have said is bullshit.

    We are facing the current crisis today due to Right wing LNP blockading renewables and at the same time enabling privatisation of monopoly markets in essential services and utilities.

    100% LNP fault.

  9. Johannes Kepler

    Little benefit ? Germany is almost 70% renewable you tosser – while Australia has the most expensive energy on earth.

    Get off the crack.

  10. Johannes Kepler

    And yet every other advanced western nation is doing it and reaping HUGE financial gains from getting their energy for free from the sun rather than having to spend trillions subsidizing coal plants who have to dig up dirt from the ground.

    Your arguments may have had some traction in the 1970’s – maybe, and certainly not amongst anyone with more than a grade 2 education.

    Honestly – this shit is getting so boring – it really is inane crap.


  11. “It’s gas that sets the marginal price in the National Electricity Market owing to where it sits in the wholesale electricity market bid stack.”

    This is true but before the withdrawal of the coal power stations the gas generators were less likely to be marginal generators. Now they are nearly always, and they are exploiting the situation to set a high marginal price

    • Ronin8317MEMBER

      Gas was setting the marginal energy price even when there are no renewable and plenty of coal fired power plants. Gas plants can be turned on quickly, coal plants cannot, that’s what allows them to set the marginal price.

  12. There’s a dude…non-subscriber to MB…who appears to have a number of MB handles under the names of famous scientists, probably to gain credibility for his often strongly expressed opinions via association with the names. After all, who’s gonna want to argue with Isaac Newton or Srinavasa Ramanujan. Or Johannes Kepler, come to that.

    Given that his opinions generally feature abusive ad-hominims I pay no attention to him or his comments.

  13. alterbrainMEMBER

    Interesting seeing the comments. Participated in a recent conversation in a large IT shop about moving their processing around the world to follow the sun, because solar is cheaper,and they’d get the benefit of cheaper processing.

    • I’m working with some guys from a large international IT crew at the moment. During our prelimary discussions they described their operations as “follow the sun”. I got the impression that this included leveraging solar for the farms. Interesting stuff.

      • HadronCollision

        In my experience (in IT as vendor, SP and client) follow the sun means having business hours support in all timezones in business hours to cover your client base.

        Nothing to do with solar

  14. drsmithyMEMBER

    Not to mention entire AGW construct is based on heavily doctored temperature record and simulations not passing smell test.

    There it is.

    • Thanks for that additional info HnH. I long suspected this forum is targeted by Russia’s troll army. I guess it shows that this site is considered to have significant influence in the public debate of this country and that its message needs to be adjusted. Congrats, that is a tremendous endorsement of what you guys are saying.

      Remember the Dutch author who wrote Geert Wilders was going to be Dutch PM, redistributed by RT and initially used as a source by MB? I since learned he is the main editor of a Dutch Breitbart-esque site and author for Breitbart:

      It fits with Russia’s modern propaganda style – proxy sites write stuff which can be used to destabilise, confuse, RT use this as ‘sources’ and redistribute. RT is then not seen as creating false articles, but the result is the same. Not sure what the Russian influence is on those proxy sites. Probably some funding, no doubt via proxy too.

      Keep exposing these people please.

  15. “There is no gas cartel.”
    Well, surprisingly, an article in news.com.au disagrees. In an article on July 6 (“‘Gas cartel’ is pushing gas prices up in Australia”) they reported “energy analyst Bruce Robertson of the Institute for Energy Economics and Financial Analysis, saying a gas cartel on the east coast of Australia is also making things (prices and supply) worse.” http://www.news.com.au/finance/business/gas-cartel-is-pushing-gas-prices-up-in-australia/news-story/61acc1864d54fb6eb4801c332e683fbd
    But never mind that, it was the ACCC in a report in 2016 that fingered the Gippsland Basin Joint Venture (of Exxon Mobil and BHP), stating there is not enough competition to stop them charging high prices locally. So the others (Santos, Origin, Arrow and Shell) fall into line.
    A bit like a cartel, actually.

  16. Andrew – you are behind the times. Hazelwood has been privately owned for more than 20 years, 10 of which were passed its use-by date. The French owners have been milking the depreciation for 10 years. Now they have decided the cow has been milked dry (actually taking all the flesh and fat as well), they want to walk away leaving the remediation bill ($400-500 million) to the state government. The state government had no role in the decision to close (except to put in subsidies).

    Take a bow, Jeffery Gibb Kennett 🙂

    • People keep mentioning them walking away from remediation. I haven’t seen it mentioned other than the comments here. Is there some sources for this? If it’s true (and seeing as this is Straya, I wouldn’t doubt it) I don’t think my opinion of Australian politics could get any lower. (It’s already in the grave!)

  17. Here was I thinking lots of Loons about today but its just Russian astroturfing instead, does this mean the Australian Loon pond has outsourced its memes to the Russian government?

  18. The push to renewables is going to cost humanity more than its worth. And for what? The AGW lie??

    The end result will be millions of unnecessary deaths globally caused by the skyrocketing inflationary cost of food prices and energy – not to mention healthcare. It’s all very sad for the bottom 95%..

    • Typical chicken little coal shill.

      If we don’t use coal forever everyone will die right now herp derp agw is scientist lies hurr durr

      You people really are showing your desperation. You remind me of the music labels when tech made them irrelevant.

      • Listen Kim Jong Un.

        Not everyone is going to die from the skyrocketing inflationary cost of food prices and energy. I’ll be alright, and you may be too. But it’s those on the margins that are going to suffer the most – if they already arn’t..

        Goodluck believing your lie..

      • My lie? You’re the one derping on about millions dying from high energy prices, with nothing to back it up.

        Ironically on an article tying high energy prices to the cronyistic behaviour of resource industries, NOT renewables adoption.

        And then you go and compare me to a murderous dictator for dismissing your unsupported hysteria. You’re not convincing anyone, you know. Like I said, you sound desperate.

  19. Thats actually a very good point that no one has touched on yet. Import 200,000 people a year and of course you need to build power stations to supply their electricity. Or does the government think they all live by candle light?

  20. HadronCollision

    The owner of the Brighton Savoy said

    What madness has possessed our politicians that they can do such harm in the name of global warming?

    No offence to the deniers (that’s what you are) but if you’re running a business like this without hedging electricity and climate risk with solar PV at the very minimum, you’re a dolt.

    AGW lie. Love it. I love this stuff.

    They’ll go down with the ship, whilst dancing and sipping Cristal – “la la la la I’m not listening”

  21. I think something has gone wrong here Macrobusiness people because I came back to add another thing to my comments about Germany spending $500 billion on renewable energy and still being reliant on coal and so on and my comments aren’t here? But not only that lots of other comments aren’t here either and so I added them up and theres 48 but the comment counter says 69 so it looks like there might be some sort of technical problem you might not be aware of hopefully your systems are okay because you said yesterday something about a Russian ISP so good luck.

  22. Us AGW skeptics are loving this! MB denies Australia having world’s most expensive power, has anything to do with their beloved renewables BUT we know “the lady doth protest too much”. Cheap baseload coal has been forced to shut because of the AGW crusade. Nat Gas baseload development was also driven by the same crusade.

    We are winning the war, the man on the street believes our narrative, not yours MB.

    Now lets move onto the only genuine de-carbonization solution. It has three prongs and they are Nuclear, Nuclear and Nuclear.

  23. Oh dear, such a nice way to waste some time on the internet reading of the minds of many halfwits on energy supply and costs.

    Are there any really brilliant minds who can harvest some of the ‘unlimited electrons’, estimated as being in the vicinity per cubic metre sufficient to instantly boil every drop of water in the oceans of this besotted world.

    The doom you fear is “Keynesian Economic Doctrine”, which demands a 10% inflation rate to operate. Time is up for those foolish ideas. Please do some reading and analysis. Everything on this little planet is finite. There are other options and opportunities awaiting your consideration. Crying is not the answer.