Australia’s Third World gas debacle just won’t go away. Via The Australian:
East coast households and businesses face a higher risk of blackouts this summer, with more generator failures likely on hot days, the energy market operator has warned.
The Australian Energy Market Operator yesterday called for urgent action, including speeding up investment in new transmission lines between states and the creation of an electricity supply reserve to deal with increasingly unreliable generators, especially in Victoria.
…The warning came as the Australian Competition & Consumer Commission said big industrial users of electricity in NSW and Victoria would keep paying up to three times historic prices for gas next year, despite the prospect of a domestic supply shortfall easing.
Tariffs offered by gas retailers are expected to stay at about $10 to $12 a gigajoule in the two largest states next year, quashing hopes that the high prices of recent years might recede as more local gas was made available.
As we know, gas sets the marginal cost of electricity owing to its role as the peaking supplier of power when renewables are constrained or demand spikes. Only gas turbines are dispatchable energy at scale – until we get a lot more storage – given nothing else can turn on and off again quickly enough.
The gas cartel has literally torn the heart our of Australia’s National Electricity Market (NEM) while successive Coalition governments pointed the finger at renewables.
Once we get a $7Gj price trigger for the Australian Domestic Gas Security Mechanism (ADGSM) that should lower prices for power generators over time. But the gas contract system is lagging so it will not happen overnight.
It is always worth repeating that under the existing ADGSM, gas prices should actually be below $5Gj as global gas prices have crashed, via the ACCC:
But nobody seems to care, is on the take, or is too dumb to know better, so blackouts it is.
