You can’t make this stuff up. Via the AFR:
Competition regulator Rod Sims has suggested big electricity companies are deliberately delaying investment in new fast-start gas power stations to defend their own profits, deepening the quarrel between government and the energy industry.
In comments that were bluntly rejected by power producers but back the position of the Morrison government, the Australian Competition and Consumer Commission chairman declared it was no surprise that generators that were benefiting from high prices weren’t investing to get prices down.
“I do find it a bit interesting that companies that are long in electricity and making a lot of money out of electricity from very high prices are complaining about a lack of investment to lower the prices down and lower their profits,” Mr Sims said.
What energy investor would put money into a gas peaker today when the security of supply is virtually zero. The recent AEMO gas outlook report showed a Winter shortfall of gas supply for southern states of up to 200PJ just five years hence as Bass Straight gas ebbs away:
Nobody knows if there’ll be gas imports, and they’ll be bloody expensive anyway. Nobody knows if there’ll be gas reservation. Nobody knows if there’ll simply be blackouts and demand destruction as gas prices reach hitherto undreamed of levels.
How can anybody deploy capital into gas peakers in this environment, Mr Sims?
The truth is the ACCC is the fuck up in the room here:
- it was the ACCC that waved through the up stream consolidation that put 80% of east gas reserves into the hands of the gas cartel, including Shell occupying 40% alone when it bought BG then Arrow even as the price debacle unfolded;
- it was the ACCC that fought against every sensible attempt to bring in gas reservation to settle the issue;
- it was the ACCC that trumpeted supply side solutions when there is no cheap gas left to extract;
- it was the ACCC that distracted the Government with all manner of stupid and peripheral intervention ideas for electricity instead of addressing the fundamental issue of gas supply.
The collapsed Australian gas market, and increasingly power well, is a direct result of ACCC failure and it will keep getting worse unless it wakes up. Rod Sims has to go to make it happen.
Give us gas retrospective reservation at $5Gj, FFS!!!!
