MB Fund Podcast: Energy Market Failure: What does it mean with Katharine McKenzie?

The National Energy Market failed this week, so we invited Western Australian energy expert Katharine McKenzie on to get her thoughts. Katherine runs an energy consultancy after years working for the West Australian government on energy policy, including decisions not to join the National Energy Market.

There are effectively 3 energy markets in Australia:

  • Western Australia where wholesale prices averaged $68/MWh over the last week.
  • Northern Territory where wholesale prices are around $70/MWh
  • The rest of Australia where wholesale prices were fixed at $300/MWh because they were spiking into the thousands and then the AEMO had to step in to force production

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Samuel Kerr is a Senior Financial Adviser at the MacroBusiness Fund, which is powered by Nucleus Wealth.

 

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The information on this blog contains general information and does not take into account your personal objectives, financial situation or needs. Past performance is not an indication of future performance. Samuel Kerr is an Authorised Representative of Nucleus Advice Pty Limited, Australian Financial Services Licensee 515796. And Nucleus Wealth is a Corporate Authorised Representative of Nucleus Advice Pty Ltd.

 

Comments

  1. GianniPKMEMBER

    What is your measure of success for community batteries? They make for great ribbon cutting ceremonies but where the costs are public, they are very dependent on government funding and make household batteries look cheap. Household batteries with enough capacity to ride through cloudy weeks of course make a grid connection in urban areas look cheap. I’d love to know what the Western Power ones cost… We have seen reductions in the grid scale >100MWh batteries however.
    https://amp.abc.net.au/article/101127080

    We’re battery constrained and will probably remain so while EVs scale up the S-curve, the most cost effective batteries will be the ones in our vehicles that are usually stationary and can be plugged into the grid.

    What is the short term solution for the NEM? If you lack the cojones to do as H&H suggests and prefer to keep the resource industry donations and post-politics board appointments the alternative is to raise the cap as the big generators are suggesting. That way the gas industry can keep their super profits, the generators can get a cut and the energy market can get back to doing what it does best. Otherwise whenever the SRMC of the peakers jumps over the cap with gas prices the market will keep breaking.
    https://www.energycouncil.com.au/analysis/a-post-blame-explainer-of-the-current-energy-crisis/

  2. Chayan GunendranMEMBER

    Katharine is right, it only makes sense under certain conditions – ie: IF you are replacing ageing lines with Microgrids.

    Most of regional WA is not network connected from Perth. They are small grids fueled by DIESEL with some solar panels.

    There is a misconception about MICROGRIDS in Western Australia. They cost many times more to service and operate in regional Western Australia, due to the distance from Perth. Most of them are using DIESEL as renewables in significant amounts would need STORAGE, which is prohibitively expensive IF you have only a handful of customers.

    Similar reason smaller mining operations use DIESEL – sheer distance from Perth.

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