Gas cartel readies blackouts for Summer

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.

Comments

    • The Horrible Scott Morrison MP

      You think we can power the country with windmills? Nuclear is the only option and we should phase it in to replace coal over the next 100 years.

  1. Oh to have a coal fired power station you bought for a dollar – here’s looking at you Trevor St Baker, grub extraordinaire

    • ERM on the make

      “FY2020 outlook is as follows:
      ➢ For the electricity retailing business, we expect:
      • Sales volume to increase to around 18.5TWh from 17.7TWh;
      • Average gross margin of around $5.00/MWh;
      • Medium-term gross margin range of $4.50-$6.00/MWh for FY2020-2022; and
      • Opex maintained at ~$22 million.
      ➢ FY2020 EBITDAF for the generation assets in Australia is expected to remain in line with:
      • Oakey Power Station underlying EBITDAF in the range of $14 million to $16 million; and
      • Neerabup is expected to deliver around $26 million EBITDAF.
      ➢ Energy Solutions to be NPAT breakeven in FY2020.
      ➢ Corporate costs are expected to remain materially on track at ~$18 million.
      ➢ The LGC strategy is expected to deliver ~$21 million NPAT.

  2. Who owns, operates, mines and profits from our gas? What percentage does the taxman get from our gas from the private corp’s who operate them. What percentage of the gas is shipped to where?

    Any talk of energy without the above facts is brainwashing spin!!

    Truth is USA owned cartels were handed our gas for dirt cheap by John Howard. This is the route of the problem, they then sell our gas to whoever they want paying a tiny royalty back to tax payers.

    The real reason we are getting a. US base is because we are there bitch.

  3. TheRedEconomistMEMBER

    I am watching this federal energy minister Angus Taylor blame the states (ie Victoria) for not investing in Coal Fire electricity generation.

    Why is this blokes being brought to account. It would be great to see DLS take this muppet on in a press conference. He just spruiks it is the states problem not theres.

    If Blackout occur.. blame the states.

  4. HadronCollision

    sometimes i feel DLSs work belongs at a big org.

    but then, there’s the issue.

    time for a MB political party, MB. And Senate.

    • GunnamattaMEMBER

      time for a MB political party, MB. And Senate

      This. The farrago of lies, duplicity, vested interest pandering and straight out corruption needs to come to an end.

      It is time for (non-violent) revolution.

      • Dibs on a back bench seat.
        Pros of Hon. footsore
        – not interested in money
        – strong dislike of corruption
        – hates rentseekers

        Cons of Hon. footsore
        – doesn’t like other people
        – bit of a shut in
        – more of Monster Raving Loony Party type candidate.