Who’s to blame for the Melbourne blackout?

Via Herald Sun:

BLACKOUTS plagued more than 60,000 homes statewide at the weekend despite Victorians being slugged hundreds of dollars a year in fees to maintain the electricity network.

The average household will pay from $404 to $673 in tariffs for poles and wires this year, a sum that can account for 20 to 40 per cent of a retail bill.

The charges are levied to pay for network maintenance and to ensure “a safe and reliable electricity supply”.

But amid “intense” demand for power at the weekend, the system buckled. Distributors blamed the blackouts on “localised fuse faults”.

Premier Daniel Andrews said on Monday that his government would consider whether it needed to compel distributors to upgrade the network.

“The distribution companies are required to maintain and improve the network, and they have been charging customers handsomely to do that,” Mr Andrews said.

More than 2000 customers were still without power about 6pm on Monday.

United Energy’s website and phone lines crashed as people tried to find out when they would be reconnected.

The reason is pretty straight forward. Victoria privatised its “poles and wires” networks under Jeff Kennett, long before other states. As a result it did not join into with the NSW and QLD “gold-plating” binge on network upgrades which was driven by some whacko incentives for public corporations, via the Garnaut Review:

As a result, VIC power prices have been cheaper than northern states over the past fifteen years as the private profit motive kept investment to minimums. United Energy is owned by Hong Kong billionaire Li Ka Shing, among many other network assets in Australia. Today there are obvious questions to ask about reliability versus efficiency.

As we know, in more recent times, VIC utility prices have skyrocketed as the Curtis Island gas cartel wreaked havoc on gas prices.

Coincidentally, both energy debacles cost roughly $80bn in wasted capex to make the energy market less efficient.

David Llewellyn-Smith
Latest posts by David Llewellyn-Smith (see all)


  1. Face it, Australia, you are becoming a 3rd world country. The signs are everywhere:
    – you can’t keep the lights on
    – your educational standards are low and falling fast
    – your hospitals have year long waiting lists, and people die in ambulances waiting at emergency departments
    – your Internet speeds rank 56th in the world, below Kazakstan!
    – you have a small land-owning elite
    – your government distracts you with trivial issues like terrorism and same sex marriage referedums
    – many of your new homes are just high-rise slums

    • The voters voted for slow Internet in 2016!

      AUS has an insane rate of immigration – faster than just about every nation on the planet! While the politicians believe and peddle lies such as “Kiwis are incapable of driving trucks and Aussies are incapable of working as accountants” in order to continue flooding AU/NZ with 3rd world males who pay no income tax at all but use services funded by income tax.

      • It was the APEX gain that plunged us into BLACKNESS, but both police and state gov have come out stating that both don’t know what to do about it. They are now trying to decide if all the lights going out on mass is actually a blackout or is it just people playing with light switches been stupid.

    • Spot on Eric. But you try telling that to the average person. They will be very defensive and then attack you for your negativism.

    • But at least we’ve got the world’s second biggest housing bubble after Hong Kong, and we’re working hard to be No. 1!

  2. Keep in mind, the LNP or the liar Matthew Guy is claiming that the power cuts are due to Hazelwood closing.

    WA is quite competent by having gas reservation while the other states are too stupid to have gas reservation. WA is also famous for building a railway for only $20 million per km in 2003. Not to mention, their desal plant is much cheaper compared to the one in Vic.

  3. David – 90% of Victoria’s electricity consumers live within a circle 100 km in diameter. It is easily the most centralised state.

    Queensland’s electricity consumers are much more broadly spread along a stretch nearly 2000 km long – it is the most de-centralised state.

    The facts are simply that you require far more poles and wires to reach a broadly spread population than you do a densely concentrated one.

      • Queensland’s electricity infrastructure was appallingly neglected for a long time and consequently plauged by problems. Recall the famous “Power Point Pete” characterisations in the Courier Snail around the beginning of the time frame on the chart.

        The chart neatly demonstrates the difference in infrastructure necessary between two concentrated populations – Vic and SA (most of SA’s population is concentrated in the far south-east corner and having driven all over the state, it’s not hard to see why. Though to be fair the post-nuclear apocalypse landscape does roll down to some very nice beaches, if you’re willing to swim with the Great Whites) – and NSW and QLD which have much more broadly spread out populations. It’s no coincidence that QLD has the highest spend despite having less people than both NSW and Vic and no coincidence that Vic should need the least.

        Not saying there is no “gold plating” going on at all but rather that population distribution does play a rather significant role here.

  4. reusachtigeMEMBER

    Renewables are the problem. We have a natural advantage in coal yet we’re chasing pipe dreams with renewables instead. Dumb!

  5. GunnamattaMEMBER

    we know the answer

    Privatisation is to blame for the Victorian blackouts which left thousands of people in darkness and 30+ degree heat

    Victoria privatised its energy production and retail networks back in the early 1990s under Jeff Kennettt. It may have made ideological sense then, but the experience of the people of Victoria since then underlines that privatisation has been a failure, and that the ‘market’ which the government of the day claimed it was creating was never a market in any real sense of the word, but a facade designed to enable a spectacular ripoff of the energy consumers of Victoria.

    In the 1980s the then SECV (State Electricity Commission of Victoria) was the classic example of a large non responsive state owned monopoly. The state had invested heavily in large coal based generators (Loy Yang and Hazelwood) in the LaTrobe Valley using the regions cheap (but environmentally unfriendly) brown coal. That generation and the investment of the 1960s and 1970s meant that Victoria had plentiful cheap base load. Blackouts and Brownouts were virtually unknown, and when outages did occur the SECV was a government entity which had an employee in virtually every larger town in the state, to handle outages, and every year produced a range of apprenticeships which ensured the ranks of these were replenished..

    I recall being in Kerang (Northern Victoria) the night a truck plowed through a pole and took out much of the towns electricity one night circa 1986, as I happened to be in one of four pubs in town drinking with one of the SEC linesmen when the energy went down. The moment it did so he mentioned ‘I’m on’ right as the Barman and others in the bar stated the same. It struck me then, and still does now that that was connection with the local community. The punters knew that one of them would sort out quickly whatever had happened and get the power back.

    The experience on Sunday night was that in our case we came home from the beach to discover the neighborhood in darkness. Then came the SMS from Powercor stating that they would try and have things sorted by a time 6 hours away. In the middle of urban Geelong. A rapid session finding torches to get kids to bed, after a quick trip to the local shopping centre (where the energy was on fine just over the other side of a main road – giving many the impression that our neighborhood had been somehow chosen) to get them some scoffs beforehand, then led to a house trying to sleep on a sweltering night.

    Immediately opposite me was a car in a driveway with an engine running, which I could just hear sufficiently to keep awake. I got up to walk around and on the nature strip over the road I found my neighbor who explained that he had put his kids to sleep in the car as one of them was having breathing issues in the house with the aircon off, and slept just fine in the car with the aircon on. One of our other neighbors came out about the same time. He was unhappy about the SMS message he had got positing a 6 hour delay (he is a big airconditioning user) and noted he had never experienced such an outage previously, and had lived in the same house since 1977. As fate would have it, he was an ex (retired) SEC technical guy. who took us through the evolution of the system after privatisation – which nobody who reads Macrobusiness or Michael West would be remotely surprised to hear. The downturn in maintenance, the end of the apprenticeships, the introduction of loads of ‘management’ which nobody on the ground had any idea of what they did, and which palpably had no idea of what the people on the ground actually did do.

    That of course brings us back to the contemporary Victorian electricity market and ‘system’ – nobody seems to know what anybody does. The old SEC had loads of people in loads of places you could call and get a response from. I wasnt stupid enough to call my electricity company on sunday night, just accepting the experience of fate in our privatised electricity retailing world – knowing that I wouldnt get to speak to anyone who could tell me what was going on, but before I spoke to anyone I would get an answer machine which would tell me there were numerous outages, that i would press a button to speak to an operator, that i would be told the call would be recorded for coaching purposes and that the peon wouldnt be able to tell me much. The guy next door told me he did try and call Powercor and got wasnt able to get the peon, but just a message stating there were widespread outages being dealt with as quickly as possible.

    A Powercor truck went by, and when we flagged him driver slowed. The driver came forth with the not very reassuring news that he thought our patch had been selected for a shutdown , while pointing out that th shops and houses just a few streets away on the other side of a main road were working fine. At one point the streetlights flickered alive before going dead again.

    Such is the experience of the present day energy consumer. Yet we pay a ‘service charge’ on our bills for this sort of rubbish. And there is the core of the difference between the old SECV and the current crop of bullshitting high advertising frauds. They cant control outcomes the way the SEC could, they dont contribute to their communities the way the SEC did, and they are all about bullshitting people to take more off them.

    About two years ago I installed 5kw of solar panels on the roof. The guy who installed it gave me the paperwork and told me he would email and CC me the notification that he sent to Powercor. He did, the address he emailed to was exactly the same as the one on the paperwork he gave me, yet months later when I called my electricity company to work out why my systems contrbutions were being taken off the electricity bill they told me, after I forwarded to them the notification he had CC’d to me, he had sent the notification to the ‘old’ email address and they hadnt got it. When I asked if all my old bills would be adjusted to reflect the notification he had sent (in hope) of course the answer was no – they had received electricity generated by my system, but they hadnt received the right notification.

    This sort of bullshit comes back to haunt governments. It came back to haunt Jeff Kennett in the late 90s after loads of Victorians went cold showers after the Longford gas plant explosion and he didnt appear particularly concerned.

    It is time (as Quiggin noted in the Guardian yesterday) to re-nationalise the energy generation and distribution system. At the same time they (the government – Federal and State) can become proactive on solar and afford those people taking on solar panels and batteries and removing gas hot water systems (how many Victorians have gas hot water after generations of being prompted to do so by government?) and replacing them with electricity.

    The Federal government writes off billions of dollars encouraging loss making landlords through negative gearing each year. This money would be far better deployed – especially seeing as 90% of negative gearing is used on pre existing household – enabling home owners to write off costs associated with taking part in the great energy transition. At the same time Victoria should be investing in exactly the same type of Elon Musk battery experiment that SA has done recently. Victoria has the wind generation capacity in Gippsland and down at Cape Bridgewater. Renationalising the system would also offer the State and Federal government scope to manage the closures of the coal fired plants in Gippsland for social ends rather than gouging the shit out of consumers than what the current owners do, as well as take greater responsibility for the environment than the current owners do. Removing the private sector from the transition which needs to be made will remove the vested interests which want to clutter up the process with their profit motives.

    Over nearly 30 year the experiment of privatisation when applied to electricity generation in Victoria has simply resulted in:-

    – Prices going up faster than previously and faster than any other state.
    – The adoption of a ‘service charge’ by retailers which has no bearing on energy used and has no direct relationship basis for the companies harvesting it from consumers to their maintenance outlays.
    – The adoption of ‘consumer mystification’ as the basis for electricity bills.
    – The complete removal of any ability to call electricity providers and get any sort of meaningful response to a range of queries, replaced by endless phone banks and recorded for coaching purposes messages
    – Employment declining and skills to maintain the system becoming scarce while current producers and retailers make sweet FA contribution to the communities they gouge.
    – A complete lack of ability of any one player in the ‘system’ to do anything proactive to prevent blackouts or deal with blackouts when they do occur.
    – Far more outages than was previously the case under the SECV.
    – The replacement of a State Owned Entity which was politically responsive with a range of companies which pay as little tax as they can, and use a range of taxation domicile arrangements to minimise their contribution to the societies they exist in.

    It is time to take electricity privatization and shove it where the lights don’t shine. The consumer experience of privatised electricity has been utter shit.

    The main outcome of sunday nights outage for me is the vastly increased desirability of a solar battery and going off grid.

    • Jumping jack flash

      Yes, privatisation of essential resources for life, and a global personal debt binge.
      Not a very good combination to keep prices down.

    • Massive gird defection. Go off grid with neighbourhood scale micro grid. Rerun of the main frame vs personal computer.

      • Mow Y, server farms are cheaper than ever though. And for a business like a real estate agency, they are better off storing their photos and stuff on a server farm – with a backup copy locally or on another server farm.

    • ErmingtonPlumbingMEMBER

      Well the only chance of ReNationalising Essential services IMHO is for Radical reform of the ALP.

      The Party has only 53,000 members and a movement of less than a 100k active new members, is all that would be required to put the Party back on its traditional path of supporting such Nationalisations and start advocating for the majority of the population once again.

      Guys like Albo (Left) need to be able to be ordered, by the rank and file, to back off on the identity Politics stuff a bit and focus on more difficult fights, like this required ReNationalisation stuff.

      The Neoliberal true believers of the ALP , just need to be kicked out of the party in my view,…the Liberal Party is the place for them.

      To make all this happen of cource, you need these new members of the party to have an overarching focus, not just a general dislike of Neoliberalism or a desire for Nationalisation of certain industries.
      I think the overarching focus of any new movement should be on “Real Democracy” (like what Morris is on about) within the Party.
      Fight that battle hard and win,…and everything else becomes much more achievable.

      A New Political Party advocating for the Same kind of direct Democracy will take millions of voters to get it of the ground,…the ALP can be forced to do so with 100s of times, a lesser number people.
      It’s all a numbers game, come and lend a hand.


      Once the ALP is restructured with real, direct Democracy,….it can then be put to the people if we do the same for the whole country.

  6. Diogenes the CynicMEMBER

    If it was the old SECV rebooted just imagine the time saved in not having to keep shifting energy suppliers to keep your bill increases down to something manageable? Isn’t that a thing in Victoria and the eastern states? And the decrease in marketing crap from these awful electricity retailers with their tricky consumer offers.

    • Nuclear fusion is unnecessary where you have hydro power. Some villages in AUS were never connected to the grid – they burn diesel to get electricity.

      Norway has a great amount of hydro power.