Via the AFR:
Global energy giant Royal Dutch Shell is considering a move to break into Australia’s domestic retail energy market to take on the established players of Origin Energy, AGL Energy and EnergyAustralia in what could be the biggest shake-up of the energy market in decades.
…”We see real opportunities to disrupt existing market structures wherever we go because we come at it from a different perspective – an energy trading perspective and large gas supplier,” Mr Wetselaar told The Australian Financial Review.
“The incumbents have strong positions but they not necessarily the lowest costs or sophisticated in trading or digital market capabilities or IT platforms which are often from the wrong century. We see ourselves as being able to disrupt existing systems in countries and I don’t think we’ll settle for less as we try it here.”
This would be amusing if it were not so horribly destructive. This is not Shell bringing “disruption” to energy retailing. It is Shell consolidating the gas cartel’s hold on Australian energy.
Remember, Shell is a member of the east coast gas cartel that is siphoning off Australia’s cheap gas to Asia at hug losses. By doing to it is applying discriminatory pricing to the local market for huge profits. That, in turn, is driving up electricity prices because gas sets the marginal cost of electricity in the National Electricity Market.
What competition would a vertically-integrated Shell “gentailer” bring to this market structure? None. It would have no incentive to compete and put pressure on its own gas supply prices.
It is simply seeking to cash in on the monopoly rents available in the downstream energy supply chain thanks to its own upstream gas gouge.
Not that that is its fault. If we let it why shouldn’t it?
