Scummo threatens to blackout Victoria on his power price fail

Welcome to the new era of partisanship run amok, via the AFR:

Federal Energy Minister Angus Taylor will seek to cut deals with “collaborative” states to shore up the destabilised national electricity grid, potentially isolating Victoria over energy and climate policy.

…It is understood the bilateral agreements will involve funding or other arrangements to achieve common goals, such as new generation, transmission lines or lowering emissions.

…Mr Taylor said the latest update from the Australian Energy Market Operator showed electricity and gas prices were coming down.

“We are starting to see the delivery on my KPI from the Prime Minister. Now it’s too early to declare victory but we are seeing very promising results,” he will say in the speech.

…”The recent CPI figures show that energy prices have now fallen for three consecutive quarters – the first time that has happened in our recorded history.”

If they have fallen, and there is little evidence for it frankly, it is largely because the global LNG glut is so enormous that it has even pushed the east coast gas price down to $7.60Gj as of Friday, though contract prices are still more like $10Gj. Remembering that gas sets the marginal cost of electricity in the National Electricity Market.

As for threatening to black out an entire state simply because it has a Labor government, go back to the drawing board, Mr Taylor. The solution for lower utlity prices is entirely within his grasp, not Victoria’s. All he needs to do is persuade Resources Mininster Matt Canavan to strengthen the Australian Donestic Gas Security Mechanism until gas contract prices fall.

Alas, Minister Canavan is off with the interests, also at the AFR:

The Morrison government says it is looking at carbon capture and storage as a climate change mitigation policy amid growing pressure from some of the nation’s largest providers of fossil fuels.

Executives from gas giant Santos and coal miner Glencore have held high-level meetings with Prime Minister Scott Morrison and his senior ministers in recent days and weeks, advocating CCS be accepted as climate policy with support from the government’s $2 billion climate solutions fund.

This fund is the centrepiece of the revamped direct action policy announced before the election, which uses money from the budget to purchase low-cost abatement.

The gas cartel and the coal miner. Charming company. No wonder they’re talking to the minister, becasue CCS is so staggeringly uneconomic versus renewables that it will never work without your money subsidising it.

But the only sensible solution that would drop gas and power prices, gas reservation, threatens both so they capture Canavan’s ear, while Victoria can just go dark ’cause, you know, Labor.

This is so much worser than Enron that it is impossible to know where to look.

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the fouding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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Comments

  1. Discovered I can buy older secondhand but working solar panels for as little as $30 a pop. At what point do cheap solar panels en masse start becoming a budget option where you can roll out in huge numbers and not worry so much about balancing price vs performance and lifespan?

    Also, when do we see DC power systems rather than inverters going into homes? It’s an interesting proposition and would save having power supply modules in many devices if you’re running solar + battery at home, even if only some of your needs are satisfied by this self-sufficient system.

    More projects to add to the list of things to research, prototype and test!

    • At the point second hand solar cells become in demand they stop being cheap, so I don;t think it’s a widespread practical solution.
      I’d have to ask why second hand cells are even available, unless the owner realised how uneconomic they are, even at 0 running costs.

      • Yeah, will have to get back to you on that. The ones I’ve been looking at are 165 W and in good nick. I intend to get two so I can test parallel and series circuits and test some cheap and home made power regulation and storage modules. For example, if I can get a 24 V air conditioner up and running with cheap panels and low total capital cost, you can cool your home in summer for free, more or less.

        All wait and see at this stage for me too. Will be interesting to see how the size and output power for the old panels compare to new ones. Given roof space is a limited commodity, I can see why people would upgrade to higher output panels as soon as their installations start to fade.

    • People are replacing older solar installations with higher efficiency installations. A lot of these were bought when the timeframe to recover costs was estimated to be 20ys but due to escalating retial energy prices paid them of in 7 – 8 years. Now the cost of replacing them with much higher efficiency panels is less than they originally paid and the payoff period is even shorter.

      The reason you can get panels so cheap is due to the costs involved in making them viable now are too high. Unless you buy them with the inverter and you have a friendly electrician, and your power setup is also ready as it is then the cost difference installing new panels instead of older ones is so small its not worth it.

      That said farmers usually have excess land and buildings to spare, dont need a grid tie inverter so could get away with a usable system for a couple of grand that would pay for itself quickly. Especially if running things like irrigation pumps, greenhouse heating etc.

      • Great info, thanks!

        Yes, agricultural sheds and industrial warehouses did cross my mind as cheap, accessible and readily available space for budget installs, particularly if you can supply power to local systems that are already reliant on a stable DC voltage with a transformer or switch-mode PSU between them and the grid.

    • Jumping jack flash

      I grew up without electricity of any kind because solar was just too expensive back then (early 80’s) and my parents had no idea. It cost them thousands to have mains connected when they finally did (late 90’s).

      but one of my mates at school had a 12v home on solar power. I remember it was very limited what they could do. They ran a fridge and lights which was pretty much the extent of it without an inverter and just a few 12v lead acid batteries.

      These days it would be a lot better of course with better batteries, and inverters that are cheap and still reasonably ok.

      I intend to go completely offgrid if and when I finally get the chance to be able to.
      Another mate of mine lives way out the back of nowhere and runs offgrid 100% solar using a couple of old forklift battery packs. It works very well.

    • Bloke at work is off grid on solar and a bank of some sort of batteries and back up back up truck batteries

      He runs a lot of 12VDC in his how, low power lighting, fans, etc

      • I suppose this is where there is opportunity for the state and federal governments to welcome in a new industry. For example, there is no standard DC power plug. If the Commonwealth was to sort out a standard, and then the states employ it in their building codes, we could see a DC House and Business industry boom, sitting parallel to the renewable energy revolution.

        Bwahahaha!!! Scummo embrace something that isn’t in a dodgy 2000 year old text! Ha! Or paid to embrace it for this corporate overlords! Bwahahaha!!! And have states and the federal government work together on a single nation building project that merges technology, manufacturing and housing! Christ, I’m comedian of the week and it’s only f’n Monday!

  2. ScoMo and co can manage to find time to entertain the gas cartel and coal miners but can’t find the time to hear a bunch of fireys warn of an impending disastrous fire season. Says it all.

  3. Jumping jack flash

    “If they have fallen, and there is little evidence for it frankly…”

    They have fallen simply because they aren’t increasing as quickly as they were.

    “”The recent CPI figures show that energy prices have now fallen for three consecutive quarters – the first time that has happened in our recorded history.””

    CPI measures inflation. So they got a negative value in the CPI for 3 consecutive quarters? So as a result they’re laying off staff? CEOs taking pay cuts?

    Doubt it very much.

    • Fabian AlderseyMEMBER

      “They have fallen simply because they aren’t increasing as quickly as they were”.

      That’s not how the index works. When a given index (such as for the Electricity expenditure class) falls, that means that out-of-pocket expenses for the average consumer have fallen. Actual dollar savings, not “rising more slowly”.

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