Via Domainfax:
The hype was interstellar, but the content …more terrestrial.
The resting face of Energy Minister Josh Frydenberg presaged the package’s modest scale.
Electricity companies will write to a million households by Christmas to offer them cheaper power plans, Prime Minister Malcolm Turnbull demanded.
…”This is a very big breakthrough, and it’s happening here and now,” the PM enthused.
…It became the Coalition’s simplest and most oft-hammered promise: repeal would cure all manner of economic ills, not least guaranteeing price relief.
Instead after four years in office itself, and sans carbon “tax”, galloping power bills are again, by this government’s own declaration, the No.1 gripe of voters.
Then there is Judith Sloan:
It’s like watching the sequel of a bad movie. The title of the first movie was: Pretending to do something about power prices.Let’s face it, we are all sick of hearing about Snowy 2.0. It will cost billions, it’s years away and probably will proceed whether or not the business case stacks up — and recall the business case could never be made in the past. The only reason it may stack up now is because the price of electricity is so high and likely to remain so.
But Malcolm Turnbull clearly can’t get enough of the photo opportunities, complete with high-vis vest. There is even a Facebook entry, shouting that the project will create 5000 jobs, enough storage to power 500,000 homes and deliver reliable, affordable energy.
Unsurprisingly, the project’s cost is not mentioned, nor when it will be finished. The strategy is clearly to rinse and repeat.
…So when did bullying become so popular with governments? At the end of the day, retailers will pass on the higher wholesale price of electricity. All the tweaking of retail contracts in the world will not matter if the wholesale price of electricity soars, as it has since the Hazelwood power station closed.
…But is the government interested in ditching or pausing the RET? Not on your nelly.
Come now, Judith. Power prices were rising long before the Hazelwood closure. They began to skyrocket in 2015 as the Curtis Island gas exporters opened. As we know, Judith is a former director at Santos, the most egregious eemplar of not having enough gas reserves, so she does not like to mention the fact.
But there is an unavoidable truth here. The transition from fossil fuels to renewables and storage is going to take decades. And as the new is built, we will need baseload power in the old forms to support it. We long ago chose gas to fulfill that “transitional” role. But with gas prices now the plaything of an ignominious pensioner-rorting cartel, only one of two things can happen. Either the adjustment will be forced upon demand as it is destroyed to balance the gas market. Or, we will have no choice but to rely on more coal.
Cutting the gas price is by far the most sensible and easiest policy option. It will require a policy sledgehammer. Alas, the ADGSM is more of a feather-duster. It has not required participation from anyone but Santos and even it can still sell at high prices under the mechanism. It should be much more heavy-handed.
It’s either that or nationalisation somewhere along the supply chain. There is no market anymore so quibbling about sovereign risk is pointless. Buying Santos and shutting one LNG train is one option. Buying (or expropriating) and force developing reserves in a national gas company with mandated rates of return is another. Either of these options would benchmark local prices. Maybe the simplest solution is just price controls for the cartel.
Knowing our idiot leaders, the most likely candidate is demand destruction in freezing pensioners and shuttering factories.
